See exactly what an extra payment does to your loan: interest saved, months cut, your new payoff date, and how that compares with a recast or with investing the money instead.
100% private. Every calculation runs inside your browser. Your loan numbers are never sent to us or to any server — there is no server to send them to.
Figures are principal and interest only. Property taxes, homeowners insurance, HOA dues and PMI are not included in the monthly payment shown.
Same money, two destinations. Both paths are simulated month by month over the life of your current loan, with identical cash out of pocket every single month, so the comparison is fair.
The difference people forget: paying down the mortgage is a guaranteed return equal to your loan rate. The investment return is an expectation, not a promise — it can be negative for years at a time. A close call on paper is not a close call in real life.
Half your payment every two weeks means 26 half-payments a year — 13 full monthly payments instead of 12.
Modeled as one extra twelfth of your payment applied to principal each month, on top of your current plan (extra payments above are excluded here so you can see the biweekly effect on its own). You can do exactly this yourself for free — third-party biweekly programs that charge a setup or per-transfer fee add nothing. Check that your servicer applies half-payments immediately instead of holding them until a full payment arrives.
Automatic termination happens at 78% LTV, and both thresholds are computed on the original amortization schedule — extra payments do not move that date by themselves. At 80% you can request cancellation in writing; the lender may require a current appraisal and a clean payment history. FHA mortgage insurance follows different rules and often cannot be cancelled at all.
Original amount, rate, term and when the first payment was due. If you know today's balance exactly, tick the box and type it — the calculator will use that figure instead of estimating it.
A little every month, a bonus once a year, a one-time lump sum, or all three at once. Every number on the page updates instantly as you type.
Interest paid, interest saved, months cut, new payoff date and the resulting monthly payment for each option — plus what that same money might have done in the market.
An extra principal payment buys you a guaranteed return equal to your mortgage rate. That is a genuinely good deal at 7% and a mediocre one at 3%. But it is not automatically the best use of the next dollar you have. Work down this list in order.
Revolving card debt in the U.S. commonly runs 20–25% APR and is not deductible. Sending $500 to a 6.75% mortgage while carrying a 22% card balance costs you roughly 15 cents on the dollar every year. Clear the expensive debt, then come back here.
Money paid into a mortgage is gone until you sell or refinance. Home equity is not a checking account, and a HELOC can be reduced or frozen exactly when you need it most. Three to six months of expenses in cash comes before any prepayment.
An employer match is an immediate 50–100% return on the money you contribute. No mortgage rate competes with that. Capture the entire match before a single extra dollar goes to the loan.
At 7% or more you are buying a risk-free 7% with no volatility and no tax on the gain. Against an expected 7% from stocks that could be down 20% next year, that certainty is worth a lot — especially if you are close to retirement.
If you locked 3% in 2021, prepaying buys a guaranteed 3% while safe Treasuries or a money market fund may pay more than that with full liquidity. The mortgage is cheap money; there is rarely a hurry to give it back.
Some people simply sleep better without a mortgage, and that is a legitimate reason rather than a math error. Just make the decision knowing the number this page gives you, instead of guessing at it.
One structural detail specific to the United States: an extra payment is applied to principal and shortens the loan, but it does not lower next month's required payment. If a lower required payment is what you need, that is exactly what a recast does: same rate, same payoff date, smaller bill.
They solve different problems. Extra payments keep the required payment unchanged and shorten the loan, so they save the most interest. A recast keeps the original payoff date and lowers the required monthly payment, so it saves less interest but frees up cash flow every month. If your goal is to be debt-free sooner, pay extra. If your goal is a smaller obligation each month after a windfall — a home sale, an inheritance, a bonus — recast. You can also do both: recast to drop the required payment, then keep paying the old amount voluntarily.
Usually not. Since January 2014 the qualified-mortgage rules have effectively removed prepayment penalties from most U.S. residential loans, and FHA, VA and USDA loans are prohibited from charging them. Older loans and some non-qualified or investor loans can still carry one, generally limited to the first three years. Read the note, or ask the servicer for a payoff statement that itemizes any prepayment charge, before making a large lump-sum payment.
This is the single most common way people lose the benefit. Servicers often park extra money as a prepaid regular payment, which advances your due date instead of reducing the balance. Three defenses: (1) make the extra payment as a separate transaction from the regular one, (2) use the servicer's specific additional-principal field in online banking rather than simply paying more, and (3) check the next statement — the principal balance should drop by the extra amount and the next due date should not have moved forward. If it did move, call and ask them to reapply it as principal-only.
Nothing changes: escrow is a separate bucket. This calculator works only with principal and interest, so if your actual bill is $3,400 and $700 of that is escrow, the payment figures here correspond to the other $2,700. Extra principal payments never reduce escrow, and your total bill will still move a little every year when the tax bill and the insurance premium are re-estimated. When the loan is finally paid off, the escrow account is closed and any surplus is refunded to you, after which you pay taxes and insurance directly.
No. A recast re-amortizes the existing loan: same rate, same remaining term, smaller balance, therefore a smaller required payment. It is not a refinance — no new loan, no appraisal in most cases and no closing costs, just a fee of roughly $250–$500. Lenders normally require a minimum lump sum of $5,000–$10,000 and the loan must be current. Government-backed loans (FHA, VA, USDA) generally cannot be recast.
Compare the two after tax. Prepaying earns a guaranteed return equal to your mortgage rate; if you itemize deductions, the interest is deductible, so the real cost of the loan — and therefore the real return on prepaying — is the rate multiplied by (1 − your marginal tax rate). Investing earns an expected return that you must also reduce by the tax on gains. The panel above runs both calculations on your numbers. Remember that the two returns are not the same kind of thing: one is certain, the other is an average across decades that includes some very bad years.
Yes, but because of arithmetic rather than magic. Paying half your monthly payment every two weeks produces 26 half-payments, which is 13 monthly payments a year instead of 12. On a typical 30-year loan that removes roughly four to six years. You can get an almost identical result by adding one twelfth of your payment to each monthly payment, at no cost and with no enrollment. Never pay a company a setup fee or a per-transfer fee to do this for you.
The Homeowners Protection Act gives you two thresholds, both computed on the original amortization schedule and the original property value: at 80% loan-to-value you can request cancellation in writing, and at 78% the servicer must cancel automatically, provided you are current. Because both are based on the original schedule, extra payments do not automatically pull the automatic date forward — you have to ask, and the lender can require an appraisal. If your home has appreciated a lot, an appraisal-based cancellation may come much sooner than either date. FHA loans use different rules, and most FHA loans originated after June 2013 carry mortgage insurance for the life of the loan.
There is no account, no lead form and no server-side processing. The amortization engine is JavaScript running in your browser; your figures never leave the device. The one place they are stored is the address bar of your own browser, so that you can bookmark or share a simulation. If you would rather not, simply don't copy the link.
What paying half your mortgage every two weeks really does, and the free way to get exactly the same result without enrolling in anything.
Both terms side by side at their own rates, plus the third option most comparisons leave out: take the 30 and pay it like a 15.
How many months until a refinance pays for itself, and why a lower rate can still leave you paying more interest in total.
PayoffLab is an independent calculator. It sells nothing, it is not affiliated with any lender, servicer or broker, and it does not collect leads or contact details of any kind. Every formula it uses is written out in plain English on the methodology page, so you can check the numbers yourself or reproduce them in a spreadsheet.
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These results are estimates, not financial advice. They are illustrative and depend entirely on the figures you enter, and they exclude taxes, insurance, PMI, HOA dues and any fee your servicer may charge. Nothing here is financial, tax or legal advice. Confirm your actual balance, rate and terms with your servicer, and speak to a licensed professional before acting. Read the full disclaimer.