How to use this calculator
- Enter your loan as it started: the amount you borrowed, the note rate, the term and the month of your first payment. Your closing disclosure or note has all four.
- Enter the extra you plan to pay each month and when it starts. For a loan you already have, start with your next payment.
- Tick a yearly extra, a lump sum (with or without a recast), paying every two weeks, or PMI if any of them applies to you.
- Set the return you'd expect if you invested the extra instead.
- Under More options, enter the balance on your latest statement if you've already paid extra, a tax rate on investment gains, or your rate on the mortgage interest deduction if you itemize.
The numbers already filled in are an example. Replace them with your own. Send extra payments marked as principal, so your servicer applies them to the balance.
How it's calculated
Each monthly payment pays that month's interest first, a twelfth of the yearly rate times the balance, and the rest reduces the balance. An extra payment goes entirely to the balance, so every later month charges less interest and more of each payment goes to principal. The loan is paid off the month the balance reaches zero.
In notation, with the original loan amount L, the monthly rate r (the yearly rate ÷ 12) and n monthly payments, the payment is P = L × r ÷ (1 − (1 + r)−n), rounded to the cent. Each month, interest = r × the balance, rounded to the cent, and the new balance = the balance + interest − P − any extra. Here r = 7.25% ÷ 12 and n = 360, so P = $2,251.18.
An example
A $330,000 loan at 7.25% for 30 years has a payment of $2,251.18 a month. As scheduled, the last payment is in December 2056, and the loan charges $480,427 of interest. Adding $200 a month from the first payment, the 279th payment, in March 2050, is the last: 6 years 9 months sooner, with $353,127 of interest, $127,300 less.
Paying extra or investing the money
The comparison follows two households that spend the same cash each month until the loan would have been paid off as scheduled. One pays the extra on the loan and, once the loan is gone, invests its whole former payment. The other pays the scheduled amount and invests the extra. Both invest at the return you enter, credited monthly like the loan's interest. In the example, by December 2056 the first has $254,085 and the second $243,994.
With no taxes, PMI or fees, paying extra is the same as an investment that returns exactly your loan's rate, so investing comes out ahead only at returns above it, 7.25% here. The interest you save is certain; an investment return is not. A tax on investment gains raises the return investing has to beat, and deducting mortgage interest lowers it: with a 24% rate on the deduction it falls to 5.51%. Money paid into a house is also hard to get back out without selling or borrowing, which the numbers don't show.
A lump sum: keep the payment or recast
If you pay a $10,000 lump sum in January 2028 and keep paying $2,251.18, the loan is paid off 2 years 8 months sooner and you save $63,400. With a recast, your servicer re-figures the payment on the lower balance over the months left: $2,182.24, with the same last payment date, and you save $13,926. A recast lowers the payment; keeping the payment saves more.
When private mortgage insurance ends
Under the Homeowners Protection Act you can ask in writing to cancel PMI once your balance reaches 80% of the home's original value, either on the original schedule or through your actual payments. It ends on its own when the original schedule reaches 78%, whatever you've paid, and no later than the month after the loan's midpoint. For the example loan on a home worth $366,700, the original schedule reaches 80% after the August 2035 payment and 78% after the October 2036 payment. With $200 a month extra you could ask after the June 2032 payment; the automatic date doesn't move. After a recast, a servicer that follows Fannie Mae's rules recalculates the dates from the new schedule, and the calculator does too.
Assumptions and limits
- A fixed-rate loan with equal monthly payments, charged a twelfth of the yearly rate each month on the balance before each payment, the usual way a fixed-rate mortgage payment is computed. For a loan that charges interest by the day, the results are an estimate: in a full year the two methods agree within a few dollars, and a loan's first year can differ by a few percent. The PMI, recast and deduction options are for mortgages.
- Payments are on time and the rate never changes. An adjustable-rate mortgage is shown at today's rate only.
- Extra payments go entirely to principal in the month they are paid. A servicer may hold a payment smaller than a full monthly payment in a suspense account until the rest arrives.
- Paying every two weeks is shown as a twelfth of a payment added each month, the same money as 26 half-payments a year, with no plan fees.
- There's no prepayment penalty. For most home loans made in recent years, federal rules allow one only on certain qualified mortgages whose rate can't rise, for at most three years, at most 2% of the amount prepaid in the first two years and 1% in the third. Other loans follow their contract and state law.
- Property tax, insurance and escrow are left out: extra payments don't change them.
- PMI follows the Homeowners Protection Act, which covers borrower-paid PMI on a one-unit home you live in, for loans made after July 29, 1999. The results assume you ask in writing to cancel as soon as your balance reaches 80% of the home's original value, with a good payment history and a home value that hasn't fallen. A premium is counted with the payment that reaches each threshold. Some loan investors allow cancellation sooner on a new appraisal; lender-paid mortgage insurance, FHA and VA loans follow different rules.
- The invest comparison assumes the same return every year and the same cash going out each month in both choices until the loan would have been paid off without extra. Real returns vary. The interest part of paying extra is a sure saving at your loan's rate; the PMI part needs a written request and a home value that holds up.
- A tax on investment gains, if you enter one, is applied once at the end, as if the investments were sold then. Investments in a retirement account are taxed differently.
- The mortgage interest deduction, if you tick it, is credited monthly at one rate on all the interest. It is worth something only if you itemize, and only on interest on up to $750,000 of mortgage debt ($375,000 married filing separately) for debt taken on after December 15, 2017; as the balance falls, the standard deduction may become larger, which the calculator doesn't check. The deduction for PMI premiums, available again from 2026, is not included.
- Dates are months, not days; the payoff month is the month of the last payment.
- It does not model adjustable rates, interest-only or balloon loans, missed payments, refinancing, FHA or VA mortgage insurance, returns that vary from year to year, or state income tax. It doesn't model loan forgiveness, so for federal student loans you hope to have forgiven, see the question below.
- The default rate is near Freddie Mac's weekly survey average for a 30-year fixed loan in the week of October 1, 2026, and the default loan is about 80% of the median price of houses sold in the second quarter of 2026. The default PMI is $50 a month per $100,000 borrowed, the middle of the range Freddie Mac gives.
Input field details
What to enter in each box, where to find the number, and how this calculator treats it. When two calculators give different answers from the same numbers, it's usually because they handle one of these differently.
Original loan amount
The amount you borrowed when the loan was made, not what you owe today.
Where to find itYour promissory note or closing disclosure ("loan amount").
How this tool treats itWith the rate and the term it sets the monthly principal and interest payment, which stays the same for the life of the loan unless you recast. To start from what you owe now, enter your balance under More options.
Allowed range$1,000 to $5,000,000
Interest rate
The note rate on your loan, to up to three decimals (6.875).
Where to find itYour promissory note or monthly mortgage statement. Use the interest rate, not the APR, which adds fees.
How this tool treats itEach month’s interest is a twelfth of this yearly rate on the balance before that month’s payment, rounded to the cent, the usual way a fixed-rate mortgage payment is computed. A loan that charges interest by the day can differ by a few dollars a year.
Allowed range0% to 20%
Not includedA rate that changes. An adjustable-rate loan is modelled at the rate you enter for its whole life.
Loan term
The number of years the loan was written for, such as 30 or 15.
Where to find itYour promissory note (the maturity date) or closing disclosure.
How this tool treats itThe loan has 12 payments a year for this many years, and the last scheduled payment pays whatever is left.
Allowed range1 to 40 years
First payment: month
The month your first full monthly payment was due.
Where to find itYour closing disclosure or promissory note. It is usually the second month after closing.
How this tool treats itEvery later payment falls one month after the one before, so this date fixes the month of every payment and every result.
First payment: year
The year your first full monthly payment was due.
Where to find itYour closing disclosure or promissory note.
Allowed range1990 to 2060
Extra each month
The amount you will add to your regular payment every month.
How this tool treats itEach extra payment goes wholly to principal with the payment of its month, after that month’s interest; your monthly payment stays the same, so the loan ends sooner. Interest saved is the interest from the month your extra payments start that you no longer pay. The payoff date is the month of the final payment, which pays the balance plus that month’s interest.
Allowed range$0 to $100,000
Not includedMissed or late payments. Send extra identified as principal: a servicer may hold a payment smaller than a full monthly payment until the rest arrives.
Extra payments start: month
The month of the first payment that includes extra. For a loan you already have, this is usually your next payment.
How this tool treats itResults count from this payment on. Interest you paid before it is the same with or without the extra, so it is not shown.
Extra payments start: year
The year of the first payment that includes extra.
How this tool treats itA start before your first payment is treated as your first payment. A start after the loan would be paid off leaves nothing to compare.
Allowed range1990 to 2100
A yearly extra
Tick it to add one extra payment each year, for example from a bonus or a tax refund.
Yearly extra
The amount you will pay once a year on top of your regular payment.
How this tool treats itApplied to principal with the payment of the month you choose, every year from your start date until the loan is paid off.
Allowed range$0 to $1,000,000
Paid each year in
The month you will make the yearly extra payment.
A lump sum
Tick it to pay one extra amount once, such as an inheritance or the proceeds of a sale.
Lump sum
The one-time amount you will pay toward principal.
How this tool treats itApplied with the payment of the month you choose. A lump sum dated before your extra payments start or after the loan is paid off is not counted.
Allowed range$0 to $5,000,000
Lump sum paid in: month
The month you will pay the lump sum.
Lump sum paid in: year
The year you will pay the lump sum.
Allowed range1990 to 2100
Recast after the lump sum
Tick it if you will ask your servicer to recast the loan after the lump sum.
How this tool treats itA recast re-amortizes the lower balance over the months left on your loan at the same rate, so your monthly payment drops and the last payment stays in the same month. Without one, your payment stays the same and the loan ends sooner. A recast is your lender’s decision, not a right, and many require a minimum lump sum.
Not includedThe other meaning of recast in federal rules, the end of an adjustable-rate, interest-only or negative-amortization loan’s introductory period.
Recast fee
What your servicer charges to recast, if anything.
Where to find itAsk your servicer.
How this tool treats itPaid in the month of the recast. It counts in the total you pay and in the comparison with investing, but not as interest.
Allowed range$0 to $5,000
Every two weeks
Tick it if you will pay half your payment every two weeks.
How this tool treats itTwenty-six half-payments a year are 13 monthly payments, one more than the schedule. The calculator adds one-twelfth of your monthly payment to each month’s payment as extra principal, which is the same money. It does not credit each half-payment on its own date, because a servicer may hold a partial payment until a full one arrives.
Not includedFees a biweekly payment service charges.
I pay PMI
Tick it if you pay private mortgage insurance on this loan.
How this tool treats itUnder the Homeowners Protection Act you can ask in writing to cancel PMI once your balance reaches 80% of your home’s original value, if you have a good payment history and the home’s value has not fallen; it ends on its own when your original schedule reaches 78%, whatever extra you have paid, and no later than the month after the loan’s midpoint. The results assume you ask as soon as you can. After a recast the dates come from the new schedule; confirm them with your servicer.
Not includedLender-paid mortgage insurance, FHA and VA loans, loans made before the Act applied (July 29, 1999), second homes and 2–4 unit properties, and cancellation on a new appraisal.
Home’s original value
The lower of the price you paid and the appraised value when you took out the loan.
Where to find itYour purchase contract and appraisal. For a refinance, the appraisal the lender used to approve it.
How this tool treats itThis is the original value the PMI thresholds are measured against (12 U.S.C. 4901(12)). The rules shown are for a one-unit home you live in.
Allowed range$1,000 to $10,000,000
Monthly PMI
The PMI premium in your monthly payment.
Where to find itYour monthly mortgage statement or escrow statement.
How this tool treats itCounted with each payment up to and including the one that reaches a threshold, in each path.
Allowed range$0 to $5,000
Return if you invested it instead
The yearly return, before tax, you would expect if you invested the extra instead of paying it on the loan.
How this tool treats itThe comparison runs two choices with the same cash going out each month until the loan would have been paid off without extra: one pays the extra on the loan, and after payoff invests the payment it no longer makes; the other invests the extra. The return is credited monthly, a twelfth each month, like the loan’s interest. The break-even return is the return investing has to beat to come out ahead; with no PMI, fee or taxes it is your loan’s rate, which paying extra saves with no market risk. Net worth from this money is each choice’s investments minus its loan balance, before any tax on gains.
Allowed range0% to 20%
Not includedReturns that vary from year to year, and investing inside a retirement account.
I know my balance
Tick it to start from the balance on your statement instead of the one your loan’s schedule shows.
Unpaid principal balance before the first extra payment
Your principal balance after the last payment before your extra payments start.
Where to find itYour latest mortgage statement ("principal balance" or "unpaid principal"). Not the payoff amount, which adds interest and fees.
How this tool treats itA balance up to $500 or 0.5% above the schedule’s figure, whichever is more, is used as entered and makes the last payment a little larger. A balance further above it is replaced by the schedule’s, because that usually means a missed payment, a modification or a wrong input.
Allowed range$0 to $5,000,000
Tax on investment gains
The rate of tax you would pay on the investment gains, if any.
How this tool treats itApplied once, at the end of the comparison, to each choice’s gains, as if the investments were sold then.
Allowed range0% to 50%
My mortgage interest is deductible
Tick it if you itemize deductions and deduct this loan’s interest.
How this tool treats itEach month the tax the interest saves is invested in each choice. Only interest on up to $750,000 of mortgage debt ($375,000 married filing separately) is deductible for debt taken on after December 15, 2017; the calculator credits all of it.
Not includedWhether itemizing beats the standard deduction as the balance falls, and the deduction for PMI premiums.
Tax rate on the deduction
Your top tax bracket’s rate.
How this tool treats itOne rate on all the interest, every year. State income tax is not modelled.
Allowed range0% to 50%
Show in today’s dollars
Turn it on to see every dollar figure at the prices of the year your extra payments start.
How this tool treats itEach year’s amounts are divided by 2.5% a year of inflation, compounded from that year. Totals are sums of each year’s figure in today’s dollars. Dates, months and rates do not change.
Questions
Is it better to pay off my mortgage early or invest?
Does paying extra lower my monthly payment?
What is a mortgage recast, and when is it worth it?
Do biweekly payments save money?
When can I stop paying PMI?
Should I make extra payments on student loans I hope to have forgiven?
Does the mortgage-interest deduction change the answer?
Can my lender charge me for paying early?
Version history
- October 8, 2026 (version 1.1.0): A lump sum and recast that bring the balance to 78% now end PMI with that payment, not the next. The break-even return no longer treats a tie within about a dollar as investing's lead ending.
- October 2, 2026 (version 1.0.0): First version: payoff date and interest saved with monthly, yearly, lump-sum and every-two-weeks extra payments; a recast; when PMI can end under federal law; and paying extra compared with investing the same money.