Current mortgage
Your baseline: continue the entered monthly principal-and-interest payment, or the calculated payment if you leave that field blank, without extra principal or a lump sum. All interest savings are measured against this strategy.
← All tools
KaynatWorks · Home finance
Mortgage Payoff Strategy Planner
See how a lump sum, extra monthly principal or a recast could change your mortgage. Compare six strategies using the same loan and inspect every payment.
For fully amortizing, monthly fixed-rate mortgages. Principal and interest only. Your inputs stay in this browser and are not saved.
Quick Start
Enter your mortgage details
Use your statement’s remaining principal, rate, remaining term and next payment date. Enter principal and interest only, excluding escrow; leave optional fields blank if unknown.Compare payoff strategies
Choose a hypothetical lump sum, extra monthly amount and target payoff period or date, then select “Compare strategies.” Each card applies only the inputs described for that strategy.Review the tradeoffs
Compare payoff dates, monthly payments and interest savings against Current mortgage. Select a strategy to inspect its schedule or download a CSV. After changing inputs, compare again.
Understand the six strategies
Lump sum · keep payment
Apply the lump sum immediately to principal, then keep the baseline monthly payment. With less principal accruing interest, the same payment can repay the mortgage sooner.
Extra monthly principal
Add the extra monthly principal amount to the baseline payment from the next payment onward. There is no lump sum in this strategy.
Lump sum + extra monthly
Apply the immediate lump sum and add extra principal each month while keeping the baseline payment. This combines both ways of reducing the balance.
Lump sum + recast
Apply the immediate lump sum, then calculate a lower monthly principal-and-interest payment using the same rate and original remaining term. No extra monthly principal is included. This models an immediate recast; actual processing can take longer.
Target payoff
Calculate the smallest monthly payment, to the cent, that pays off the modeled loan within your chosen payment count or by a due date on or before your target date. This comparison uses neither the lump sum nor the extra monthly amount.
Earlier payoff or a lower required payment?
These are different goals. Keeping your payment after a lump sum, or adding monthly principal, can shorten repayment without lowering the required payment. A recast spreads the reduced balance over the original remaining term to lower required principal and interest. The lower payment generally saves less interest than keeping the higher payment after the same lump sum. Escrow can still change your total monthly bill.
Target payoff is a modeled payment amount, not an approved change to your loan agreement. A lower modeled payment does not give permission to pay less than your contractual requirement.
Worked example · hypothetical mortgage
This educational example uses the same calculation engine as the planner. It is separate from your results and does not change your form inputs.
Reproduce these results
- Fixed-rate, fully amortizing loan: $250,000 remaining principal, 6% annual interest, 20 years (240 months) remaining.
- Balance date: January 1, 2026. Next payment: February 1, 2026. Leave monthly principal + interest and maturity date blank.
- Immediate lump sum: $25,000. Extra monthly principal: $250. Target method: Number of monthly payments; target period: 120 months.
Hypothetical estimates in USD. Monthly paid includes extra principal where applicable, excludes the immediate lump sum, and may differ on the final payment.
Scroll horizontally to see all columns.
| Strategy | Monthly paid | Payments to payoff | Payoff date | Remaining interest | Interest saved |
|---|---|---|---|---|---|
| Current mortgage | $1,791.08 | 240 | Jan 1, 2046 | $179,858.16 | $0.00 |
| Lump sum · keep payment | $1,791.08 | 199 | Aug 1, 2042 | $130,220.58 | $49,637.58 |
| Extra monthly principal | $2,041.08 | 191 | Dec 1, 2041 | $137,888.20 | $41,969.96 |
| Lump sum + extra monthly | $2,041.08 | 161 | Jun 1, 2039 | $102,852.55 | $77,005.61 |
| Lump sum + recast | $1,611.97 | 240 | Jan 1, 2046 | $161,872.78 | $17,985.38 |
| Target payoff | $2,775.52 | 120 | Jan 1, 2036 | $83,061.11 | $96,797.05 |
Compare “Lump sum · keep payment” with “Lump sum + recast”: both use the same $25,000 upfront reduction, but one keeps the payment to finish sooner and the other lowers the payment over the remaining term. Target payoff uses no lump sum. Interest savings exclude recast fees and all other omitted costs.
Frequently asked questions
How do extra principal payments help?
Principal is the amount still borrowed. Reducing it leaves less balance on which future interest accrues. In this planner, monthly extra principal is applied after interest and the regular payment. Ask your servicer how to designate extra funds for principal and whether your loan has any prepayment restrictions or penalties.
Is the estimated payoff date an official payoff quote?
No. It is the final payment date in this monthly model. A target between payment dates uses the last due date on or before that target. An official payoff amount may include daily interest and fees that this planner excludes; request a quote from your servicer.
What does “Interest saved” mean?
It is the remaining interest on Current mortgage minus the remaining interest on the selected strategy, using the same loan inputs. It is not a return on investment and does not include fees or tax effects. A later Target payoff can cost more interest, producing negative savings.
Will a lump sum automatically lower my required payment?
An extra principal payment generally does not by itself change the contractual principal-and-interest payment. Keeping that payment can shorten repayment. A servicer-approved recast recalculates the payment over the remaining term; eligibility, minimum lump sums, fees and timing vary. This planner models the recast at the same interest rate and excludes its fees.
Which mortgages and costs does this planner cover?
The planner supports fully amortizing, monthly fixed-rate mortgages in US dollars. It excludes adjustable-rate, interest-only and balloon loans, as well as escrow, property taxes, insurance, fees, penalties and tax effects. Every due date accrues a full month of interest, even if the next payment is less than a month after the balance date. See the methodology below for rounding and timing details.
Further reading: CFPB: mortgage amortization and Fannie Mae: recast loan overview. These explain general concepts; your servicer determines what is available for your loan.
How the estimates work
The balance date is the start of the model. Each due date represents one full month of interest, even if the first date is less than a calendar month away. Later due dates keep the first payment’s day of the month, capped at month-end. This model does not calculate daily interest.
An immediate lump sum reduces principal on the balance date, before any interest accrues. Each month, interest accrues, the regular payment is applied, then extra principal is applied. Future lump sums in the engine apply after those payments; a recast changes the following month’s payment. The six comparisons here use an immediate lump sum.
The calculated principal-and-interest payment uses M = Br / [1 − (1 + r)−n], where B is the balance, r is the annual rate divided by 12, and n is remaining months. At 0% interest, M = B / n. A recast uses the reduced balance and original remaining term at the same rate.
Money is rounded to the nearest cent, with half cents rounded up. Each month’s interest is rounded before payments are applied. Totals sum the actual schedule. A calculated or recast payment settles any rounding residual on the final contractual payment; this can differ slightly from the usual payment. An entered payment stays fixed until the final capped payment, so a small residual can require another month. Balances never go below zero.
A fractional year is rounded to the nearest whole month. If you supply a maturity date, it must exactly match the final due date implied by your remaining term. Enter the payment from your statement for a comparison closest to your current mortgage; leaving it blank estimates a payment from the balance and term.
The target strategy uses no lump sum. It finds the smallest monthly payment, to the cent, that repays the rounded schedule within your period or on a due date on or before your target date. A later target can require a lower payment and cost more interest. Interest savings can therefore be negative.
Estimates exclude escrow, taxes, insurance, fees, penalties and tax effects. Recasting depends on your servicer’s eligibility rules, minimum principal reduction, processing time and fees. Confirm how extra payments are applied and request an official payoff quote before acting.
Learn more: CFPB guide to mortgage amortization.