Mortgage Prepayment Calculator
Calculate savings from extra mortgage payments and accelerated payoff strategies
Mortgage Prepayment Analysis
Current Mortgage
Payment Options
Standard monthly payments (12 payments/year)
Prepayment Options
Periodic Extra Payments
Per monthly payment
One-time Lump Sum
Prepayment Summary
| Metric | Original Schedule | With Prepayment | Difference |
|---|---|---|---|
| Payoff Time | 30.0 years | 30.0 years | 0.0 years earlier |
| Payment Amount | $599.55 monthly | $599.55 monthly | $0.00 more |
| Monthly Equivalent | $599.55 | $599.55 | $0.00 more |
| Number of Payments | 360 | 360 | 0 fewer |
| Total Interest | $115,838.189 | $115,838.189 | $0 less |
| Total Payments | $215,838.189 | $215,838.189 | $0 saved |
Prepayment Strategy Recommendations
Switching to accelerated bi-weekly payments (paying half your monthly payment every two weeks) can save significant interest without increasing your monthly budget.
Benefits of Prepayment
Interest Savings
Reduce total interest paid over loan term
Faster Payoff
Own your home sooner and build equity faster
Peace of Mind
Financial freedom and reduced debt stress
Payment Frequency Guide
Accelerated Bi-weekly
Pay monthly payment ÷ 2 every 2 weeks (26 payments = 13 months)
Standard Bi-weekly
Pay same total as monthly but spread over 26 payments
Weekly
Pay monthly payment ÷ 4 every week (52 payments)
Understanding Mortgage Prepayment
What is Mortgage Prepayment?
Mortgage prepayment means paying more than your required monthly payment to reduce the principal balance faster. This can be done through periodic extra payments or one-time lump sum payments.
How It Works
- •Extra payments go directly to principal reduction
- •Lower principal means less interest accrual
- •Compound effect accelerates payoff timeline
Prepayment Strategies
Periodic Extra Payments
Add a fixed amount to each payment. Even $50-100 extra monthly can save thousands in interest.
Accelerated Payment Schedule
Pay bi-weekly instead of monthly to make 13 months of payments per year automatically.
Lump Sum Payments
Use windfalls like bonuses, tax refunds, or inheritance to make large principal payments.
Important Considerations
Before Prepaying Consider:
- • Emergency fund fully funded (3-6 months expenses)
- • High-interest debt paid off (credit cards, etc.)
- • Maximum employer 401(k) match contribution
- • Mortgage interest tax deductions
Prepayment Penalties:
- • Check your loan documents for penalties
- • Some loans charge fees for early payoff
- • FHA and VA loans typically have no penalties
- • Conventional loans may have early payoff restrictions