401(k) Loan Calculator
Calculate 401(k) loan repayment, interest paid back to yourself, and the opportunity cost of lost market returns. See the true cost of borrowing from retirement.
Mortgage Prepayment Calculator
Calculate mortgage prepayment savings from lump sums and recurring extra payments. See timing impact, lump-sum scenarios, and balance projection.
$
%
yrs
$
$
Base Payment⧉
$1,890.58
Standard monthly P&I
Interest Saved⧉
$69,044.00
From prepayment + extra
Years Saved⧉
3.9 years
47 fewer payments
Standard Payoff⧉
25 yrs
Interest: $287,174.00
With Prepayment⧉
21.1 yrs
Interest: $218,130.00
Savings Multiple⧉
3.5x
Interest saved per $1 prepaid
Lump-Sum Scenarios
| Lump Sum | Payoff | Total Interest | Interest Saved |
|---|---|---|---|
| None | 25 yrs | $287,174.00 | — |
| $5,000.00 | 24 yrs | $267,701.00 | $19,473.00 |
| $10,000.00 | 22.9 yrs | $249,828.00 | $37,346.00 |
| $20,000.00 | 21.1 yrs | $218,130.00 | $69,044.00 |
| $30,000.00 | 19.5 yrs | $190,876.00 | $96,298.00 |
| $50,000.00 | 16.7 yrs | $146,497.00 | $140,677.00 |
| $75,000.00 | 13.7 yrs | $104,776.00 | $182,398.00 |
| $100,000.00 | 11.3 yrs | $73,761.00 | $213,413.00 |
Timing Matters
| Applied When | Payoff | Interest Saved |
|---|---|---|
| Now | 21.1 yrs | $69,044.00 |
| Month 6 | 21.3 yrs | $66,943.00 |
| Month 12 | 21.3 yrs | $64,478.00 |
| Month 24 | 21.5 yrs | $59,735.00 |
| Month 36 | 21.8 yrs | $55,231.00 |
| Month 60 | 22.1 yrs | $46,901.00 |
Balance After Prepayment
| Year | Balance |
|---|---|
| 1 | $254,037.00 |
| 2 | $247,676.00 |
| 3 | $240,888.00 |
| 4 | $233,645.00 |
| 5 | $225,918.00 |
| 6 | $217,673.00 |
| 7 | $208,875.00 |
| 8 | $199,489.00 |
| 9 | $189,474.00 |
| 10 | $178,788.00 |
| 11 | $167,387.00 |
| 12 | $155,222.00 |
| 13 | $142,242.00 |
| 14 | $128,393.00 |
| 15 | $113,617.00 |
Planning notes, formulas, and examples
About the Mortgage Prepayment Calculator
Mortgage prepayment is any payment above the required amount, whether it is a one-time lump sum or a recurring extra payment. Because mortgage interest is front-loaded, early prepayments usually have the biggest effect on total interest cost and payoff timing.
Timing matters as much as amount. A $20,000 prepayment made in month 1 reduces the balance for the full remaining term, while the same payment made years later saves much less interest. That difference is why windfalls such as bonuses, tax refunds, or inheritance can be powerful when applied early.
This calculator models lump-sum and recurring prepayments, compares multiple amounts, and shows how the application date changes payoff speed, interest savings, and the balance path.
When This Page Helps
Use this calculator to measure the guaranteed return from sending extra principal to your mortgage. It helps you compare payoff speed, interest savings, and timing so you can decide whether a lump sum, recurring extra payment, or no prepayment is the better fit for your cash flow.
How to Use the Inputs
- Enter your current mortgage balance.
- Input the interest rate and remaining term.
- Set the lump-sum prepayment amount.
- Choose when to apply the lump sum (now or later).
- Optionally add recurring monthly extra payments.
- Compare lump-sum scenarios in the table.
- Check the timing table to see how delay reduces savings.
Formula used
Prepayment reduces principal directly. Interest saved = Standard schedule interest − Prepaid schedule interest. Savings multiple = Interest saved / Prepayment amount. Timing: earlier prepayment → more remaining months to compound the benefit.Example Calculation
Result: Interest saved: $47,300 — Years saved: 3.2 — Savings multiple: 2.4x — Payoff: 21.8 years
A $20K lump-sum prepayment on $280K at 6.5% saves $47,300 in interest (2.4x the prepayment!) and cuts 3.2 years off the loan. Applied now vs in year 3, the savings drop from $47,300 to $38,900 — demonstrating the cost of delay.
Tips & Best Practices
- Every dollar prepaid early saves $2-3 in interest over the loan life — treat prepayment as an investment.
- Apply windfalls (bonuses, tax refunds, inheritance) immediately rather than waiting for a "large" amount.
- The timing table shows that even a 1-year delay costs thousands — do not wait for the "right time."
- Combine a lump sum with small recurring payments for compounding acceleration.
- Ensure no prepayment penalty exists before making large lump-sum payments.
- Keep 3-6 months emergency fund — do not deplete savings completely for prepayment.
Timing Effect
The earlier the prepayment, the more future interest it avoids because more of the remaining schedule is still outstanding.
Lump Sum vs Extra Monthly
A single windfall and a recurring extra payment can both accelerate payoff, but they affect the balance path differently.
Before You Prepay
Check for prepayment penalties, keep an emergency reserve, and confirm whether your lender recasts or simply shortens the term.
Sources & Methodology
Last updated:
Methodology
This page compares the base amortization path with one or more scenarios where a lump sum or recurring extra payment is applied directly to principal. The savings are measured as the difference between total scheduled interest on the base path and total scheduled interest after the lower balance is carried through the remaining term. Timing tables are then built by shifting the prepayment later in the schedule and recomputing the remaining interest path each time.
The output is a payoff-planning worksheet rather than a lender payoff statement. It does not include recast fees, reinvestment tradeoffs, or any prepayment penalty unless the user manually reflects those costs in the scenario.
Sources
- What is a prepayment penalty? (Consumer Financial Protection Bureau) — CFPB definition of mortgage prepayment penalties and how they affect the economics of paying early.
- Can I be charged a penalty for paying off my mortgage early? (Consumer Financial Protection Bureau) — CFPB consumer guidance on checking loan documents for prepayment costs before sending large principal reductions.
Frequently Asked Questions
On a typical 6-7% mortgage, every $10,000 prepaid early saves $20,000-30,000 in interest over the remaining term. The savings multiple ranges from 1.5x to 3x, depending on rate, remaining term, and when the prepayment is made.
Compare your mortgage rate to expected after-tax investment returns. At 6.5% mortgage vs 8-10% stock market average, investing might win mathematically. But mortgage prepayment is a guaranteed, risk-free return. Many advisors suggest a split approach: max out retirement account match, build emergency fund, then apply excess to mortgage.
As early as possible. The first half of a mortgage term is when balances are highest and interest charges are greatest. A prepayment in year 1 saves roughly 40-50% more interest than the same amount in year 10. Even delaying by one year reduces savings noticeably.
After a lump-sum prepayment, you typically have two options: (1) keep the same payment and pay off sooner, or (2) recast the loan for lower payments over the same term. Option 1 saves more interest overall. Option 2 provides cash flow relief. Most advisors recommend option 1 unless cash flow is a concern.
Recasting (re-amortization) is when the lender recalculates your monthly payment based on the new, lower balance while keeping the same rate and remaining term. This lowers your required payment. Unlike refinancing, recasting has no closing costs (typically a $250-500 fee) and does not change your rate.
Most conventional US mortgages allow unlimited prepayment without penalty. Some loans (older FHA, non-QM, commercial) may limit annual prepayment to 10-20% of the original balance. Check your loan agreement for any prepayment restrictions before making large payments.
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