Mortgage Payoff Calculator

What if we told you that you didn’t have to wait 15 or 30 years to pay off your mortgage? Would you be willing to make some changes to your spending habits to achieve debt freedom faster? Our mortgage payoff calculator can help you see just what it takes to become mortgage free!

You can use our mortgage payoff calculator to evaluate your current plan of action. By following a few simple steps, you can see just how much you’ve paid--and what you have left! Then, you can run different scenarios to see how much faster you can be debt free by making additional payments each month.

How to Use this Mortgage Payoff Calculator (in 5 steps)

Are you wondering how close you are to debt freedom? Using our mortgage payoff calculator will give you an approximation after following just five easy steps.

To make the calculator as accurate as possible, you want to gather your loan paperwork before you get started. A print out of the paperwork or access to your online account will both work!

Step 1 - Enter Your Original Loan Amount

To start using the mortgage payoff calculator, you want to input your original loan amount. The original loan amount is the amount of money that you financed, or borrowed, when you took out the mortgage loan.

It is important to note that this is different from the current principal, or the remaining amount of money that you owe. The original loan amount is not always reflected on your monthly statement. Instead, you may need to look at the account details online or the original loan paperwork.

Step 2 - Insert Loan Term

Next, you want to fill in the loan term. The term is the amount of time that you have to pay off your loan in full. Typical mortgage loan terms in the United States are either 15-year or 30-year loans.

Step 3 - Include Interest Rate

After identifying your original loan amount and the loan term, you need to input your interest rate. Interest rates should be clearly displayed on your mortgage statement each month. Additionally, you can also find this information in your original loan paperwork.

Simply put, a loan interest rate is the price you pay to borrow money from a lender. Most American borrowers take out a mortgage with a fixed interest rate. That means that the rate does not change over time. Instead, it is related to the market conditions when you first took out your mortgage. This is helpful because your mortgage payments then remain consistent over the life of your loan.

Step 4 - Enter Additional Monthly Principal Payments

Are you able to set aside extra money each month? Then, you could make an additional monthly principal payment. Additional monthly principal payments are supplementary, or additional, payments that you make each month to the loan balance.

When you set up these payments with your lender, you want to make sure that the payments are applied directly to the principal balance. By ensuring that your payment goes to the principal, you pay less interest over the life of the loan and shorten the timeframe of the loan as well. Essentially, you actually pay off your mortgage early!

If you aren’t currently paying any extra money toward your mortgage each month, enter 0 for this section.

Step 5 - Hit Calculate

After you’ve entered in all the necessary information, you’re ready to see the mortgage calculator in action. Hit calculate to get insight into your mortgage payoff!

You can view the data in two different ways. The first view shows a graph of your mortgage payoff over time. Then, you can also click the “table data” button. From this view, the mortgage payoff calculator shows you a breakdown of your monthly mortgage payments. Specifically, you see how much you pay toward the principal and how much you pay in interest each month.

Do you want to see how fast you can pay off your mortgage? You can start with a $0 additional monthly payment and adjust from there. See the impact of an extra $50, $100, or even $500 a month. You might be surprised to see the impact that skipping a dinner out or dialing back your impulse spending can have!

Mortgage Payoff Calculator FAQs

Now that you’ve had a chance to check out our mortgage payoff calculator, you probably have some questions about paying off your mortgage early. Let’s explore some of the most frequently asked questions!

What are the benefits of a paid off house?

There are several benefits to paying off your house. The biggest benefit that we think of when it comes to a paid off mortgage is peace of mind. Personally, there hasn’t been a better feeling that we felt knowing that our family would always have a place to call home.

In addition to the psychological benefits to a paid off house, there are mathematical ones as well. By eliminating your mortgage payment, you have freed up a significant amount of cash flow each month. The average mortgage payment in the US is between $2,883 (30-year loan) and $3,759 (15-year loan). Once your mortgage is paid, that’s a considerable amount of money left in your budget. You can direct that money to investing, college funds, general savings, or even sinking funds for vacations and more!

By paying off your mortgage early, you not only have extra cash flow, you save money over the life of the loan. Every month that you have a mortgage, you are charged interest. By shortening your loan, you pay less money in interest.

Finally, a paid off home has more equity. This money can be used in the future if a need arises. Of course, we advise you to be careful when taking out any type of loan. Home equity loans can be used to consolidate debt, renovate your home, pay for college, and more.

Should I pay extra on my mortgage or invest?

It’s a personal choice if you want to put extra money toward your mortgage or invest. Know that if you pay your mortgage off early, that frees up a considerable amount of money you can invest later. However, it's also worth noting the magic of compounding. The longer your money is in the stock market, the more time you have to watch it grow!

Additionally, we would encourage you to consider the possibility of doing both. If you have an extra $200 a month, consider investing some and putting the rest toward your mortgage.

When should I not pay extra on my mortgage?

In many instances, putting extra money toward your mortgage makes sense. However, there are some situations where you might not want to. If you have high-interest debt, you want to tackle that first. A good way to determine what qualifies as high interest is to look at the different interest rates. If you are paying 20% or 25% on your credit card debt, definitely pay that off before putting extra money toward your mortgage.

You also want to make sure that you have ample savings in your emergency fund. Paying off your mortgage offers peace of mind. But a house isn’t nearly as accessible as a savings account. In the case of a financial emergency, you want to make sure that you have at least several months of income set aside in an emergency fund.

What is the best way to make extra mortgage payments?

Did you like what you saw when you used our mortgage payoff calculator? Great! Now you’re probably wondering how to make extra payments. There are a few different ways that you can find extra money to put towards your mortgage.

Set aside any windfalls and make a lump payment.
Increase your additionally monthly payment amounts when you get a raise.
Put any money that you save throughout the month into a bank bucket or separate account. For instance, if you skip the drive thru in favor of cooking at home, set aside that savings! Then, put that money towards your mortgage.
Dedicate your additional paychecks to your mortgage. If you build a monthly budget but get paid biweekly, you probably have two extra paychecks a year that you can send to your mortgage.
Round up! It might not feel like much, but even just a few dollars a month can save you money in the long run.

How do I make my final mortgage payment?

If you think your final mortgage payment is as simple as one easy click, think again! There are actually a few steps that you need to follow.

Request a payoff quote. You can usually do this through your online account.
Wait for the payoff quote from the lender.
Submit the final amount following their directions. You may have to mail in a check or complete a wire transfer.
Receive and store paperwork that verifies your loan repayment.
Celebrate your mortgage freedom!

Mortgage Free Family Stories

Does paying off your mortgage feel impossible? Do you feel like you can’t quite see the light at the end of the tunnel? Let some of our favorite mortgage free family stories motivate you to keep going!

George Kamel Becomes a Mortgage-Free Millionaire

George Kamel, a Ramsey Solutions superstar, didn’t always live a mortgage free life. In fact, he struggled with consumer debt like most of us. After finishing college, he left with a degree and $40,000 in debt. This debt was a combination of student loans and consumer debt.

Fortunately, soon after, Kammel discovered Dave Ramsey’s Baby Steps. In a year and a half, Kammel followed a plan that allowed him to become debt free. Once he got married, he and his wife recommitted themselves to a debt-free future. In three short years, their mortgage payoff calculator clocked in at $0. They found debt freedom once again!

Kevin Hooper’s Mortgage Freedom Journey

Kevin Hooper chose a mortgage-free life. Specifically, he chose to aggressively pay down his mortgage instead of investing. While this strategy certainly won’t work for everyone, it yielded the results he wanted.

Because Kevin worked at such a fast clip, he wasn’t missing out on that much time in the market. In fact, he and his wife defeated their debt in five years. During that time, he felt more and more financial security as they inched close to debt freedom.

Keith Robinson’s Debt Freedom in a Financial Crisis

It didn’t take Keith Robinson long to see the value in becoming debt free. He and his wife decided that they really valued the peace of mind that being debt free brings. So they committed to paying off their mortgage despite earning less than six figures.

When the Robinsons started their journey, they applied two important strategies. First of all, they said yes when other people said no. That meant taking on extra hours at work. Keith was able to take on so much overtime, he effectively doubled his salary for the year and landed a raise!

Additionally, they were also careful not to inflate their lifestyles. Many times, people start to spend more as soon as they are earning more. The Robinsons maintained a watchful eye and kept their spending in check. This allowed them to pay extra toward their mortgage.

How the Hermansons Prioritize Debt-Free Living

Leslie and Mike Hermanson find real value in living debt free. In fact, they managed to achieve this debt free lifestyle as young parents. Oftentimes, it feels like money is stretched so thin when your kids are young. As a result, many people don’t pursue debt free living.

However, the Hermansons show that it is possible to slash your debt. In just 8 years, they paid off their mortgage. Plus, they’ve started to explore other real estate options with rental properties.

Bob Lotich Swaps Debt for Debt Freedom

Bob Lotich’s story is familiar to a lot of people. After college, he struggled with the same thing that most of us do--saying no to ourselves. There definitely were factors like the Great Recession and other things that made money tight. But Bob is quick to point out that the biggest issue is what he calls “stupid spending”. This spending led him to $15,000 in consumer debt. Then, he tied the knot--and his debt grew. He and his wife had a combined total of nearly $50,000 in student loans and credit card debt.

Fortunately, they carved out a plan to not only pay down that debt but also achieve mortgage freedom. His story is definitely a good reminder of the power of purposeful spending.

Final Thoughts for Mortgage Payoff Calculator

Have you ever wondered what mortgage-free living might feel like? Are you curious how close you are to achieving debt freedom? You can use our mortgage payoff calculator to explore your current situation in five easy steps! Then, you can adjust the additional payment portion of the calculator to run scenarios that will help you see just how much faster you can destroy your debt.