Early Payoff Savings Calculator
Find out how much time and interest you can save with extra payments.
What this calculator does
During the early years of a loan, a massive portion of your payment goes to interest. If you have extra cash, making additional principal payments can significantly shorten your loan term and save you thousands in interest. Enter your current loan balance, remaining term, interest rate, and your planned extra monthly or lump sum payments. Our tool instantly calculates the total interest saved and how many months earlier you'll become debt-free. Always compare your 'interest savings' against 'potential investment returns' before deciding.
Worked examples
- Balance of 5M, 20 years remaining at 2.5%. Paying a 1M lump sum saves about 890K in interest and cuts the term by 5 years.
- Adding an extra 5,000 every month on the same loan saves roughly 650K in interest and pays off the debt 4.5 years early.
Frequently asked questions
- Is it always a good idea to pay off a mortgage early?
- Not necessarily. If your mortgage rate is very low (e.g., 2%) and you expect higher returns from investing in the stock market (e.g., 7%), investing might build more wealth. It depends on your risk tolerance.
- Are there prepayment penalties?
- Many lenders charge early repayment fees (typically 1%-2%) if you pay off a large chunk within the first 1-3 years. Check your contract and deduct fees from your savings.