Mortgage Payoff Calculator

A mortgage payoff calculator answers a narrower question than a mortgage calculator. A mortgage calculator gives the payment. This one gives the date the loan ends, what it will have cost in interest by then, and what moves if more than the scheduled amount is paid. Over thirty years the difference between those questions is not academic: on $300,000 at 6.500%, the scheduled payment is $1,896.21 and the interest across the full term is $382,628.90 — more than the sum borrowed.

The length of the term is also what makes a mortgage schedule counter-intuitive. The first payment on that loan puts $1,625.00 towards interest and $271.21 against the balance. The first twelve payments come to $22,754.52, of which $19,401.28 is interest and $3,353.24 reduces the principal. The balance does not fall below half the original $300,000 until payment 257 of 360. Early money is therefore worth far more than late money, and that is the entire case for paying extra.

This page runs the schedule a servicer runs, in whole cents, and shows every row of it. The payoff date is the date of the last row, not an estimate from a closed-form formula. Bi-weekly is computed as true bi-weekly — a payment every fourteen days, twenty-six to the year, interest accrued at the annual rate divided by twenty-six — rather than as the thirteenth-payment approximation, because the two do not give the same answer.

Every dollar above the scheduled payment is treated here as reducing the balance on the day it is paid. That is one of two things a lender can do with it. The other is to count it toward your next scheduled payment, which moves the due date forward and leaves the balance where it was — and the saving below is then not smaller, it is zero. The standard mortgage contract lets the lender choose; on a federal student loan choosing for you is the default. Send it as a principal-only payment, in writing, and check the next statement.

Anything less than a full scheduled payment may do nothing at all. A servicer is entitled to hold a short payment as unapplied funds — in suspense — until enough accumulates to cover a whole payment, and Regulation Z permits it. This page amortizes whatever payment you enter, so a figure below the scheduled amount produces a schedule your servicer may not follow.

An extra payment shortens the schedule; it does not lower the payment. Rows come off the end and the monthly amount stays where it is. Re-amortizing the remaining balance over the remaining term — a recast — does the opposite: the payment falls and the end date does not move. A recast has to be requested, is usually charged for, and is not modelled here.

The payoff date is the date of the last row of the schedule. With no extras on a thirty-year loan that is the scheduled maturity: a first payment on 1 October 2026 puts the 360th on 1 September 2056. Anything extra moves it, and on a mortgage it moves by years rather than months — $200 a month brings the last row forward to the 277th payment, 1 October 2049.

The payment modelled here is principal and interest only. Escrow for property tax, home insurance and any mortgage insurance is collected alongside it by most servicers, and none of it appears in this calculation. The monthly bill is therefore larger than the $1,896.21 in the example below; the part that pays the loan off is the $1,896.21. Extra money also has to reach the principal to shorten anything — applied instead as a prepayment of next month's bill, it changes nothing about the schedule.

Bi-weekly only behaves as bi-weekly if each payment is applied when it arrives. Some lenders hold the two half-payments and post them together once a month. Interest then accrues monthly and the only gain left is the thirteenth payment that twenty-six halves add up to over a year. Both are computed below: applied on arrival, the $300,000 example ends on 13 October 2050 having paid $88,124.09 less interest; held and posted monthly, it ends on 1 November 2050 having saved $87,255.22. Nineteen days and $868.87 separate the two treatments, and which one applies is a question for the servicer rather than for arithmetic.

Interest saved is measured against the same mortgage with no extras — same balance, same rate, same scheduled payment, paid monthly to the end of its term. An extra payment does not re-amortize the loan and does not lower the scheduled payment; it removes rows from the end of the schedule. That is what the months saved and interest saved figures count, and nothing else changes underneath them.

The last payment is smaller than the others. The scheduled payment is rounded up to the next cent — $1,896.204070 becomes $1,896.21 — so the schedule can never run past its stated term. Three hundred and fifty-nine payments of $1,896.21 are followed by one of $1,889.51. Rounding to the nearest cent instead would give $1,896.20 and leave a 361st payment of $4.74, which is arithmetically correct and reads as a bug.

M

the scheduled payment, rounded up to the next cent

P

the balance at the start, in cents

r

the periodic rate — the APR divided by 100 and by 12

n

the term, in months

bₖ₋₁

the balance before payment k

iₖ

the interest charged in period k, rounded half-up to the cent

The payment is rounded up so the schedule cannot run past the term. Rounding to the nearest cent instead leaves a stray final payment of a few dollars on a long loan.

The payoff date comes from running the schedule, not from the formula. The two agree on ordinary loans and can differ by several months when the payment barely exceeds the interest.

The rounding rule, the final-payment adjustment and the published test vectors are all on the methodology page.

One loan or several, fixed payment or revolving — that is the real question behind this family of calculators, and it decides which page answers yours.