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Your scenario
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Interest saved after the entered fee
—- Months saved versus schedule
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- Calculated scheduled monthly P&I
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- Payoff with lump sum + monthly extra
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- Payoff with lump sum only
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- Interest saved before the entered fee
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- Lump sum actually applied
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- Fee deducted from interest savings
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Remaining balance and interest comparison
Month 0 is today. Rows include annual checkpoints and the accelerated payoff month. Payments continue unchanged until payoff; this is not a recast.
| Checkpoint | Scheduled balance | Accelerated balance | Scheduled interest to date | Accelerated interest to date |
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Model a lump sum on the loan you have today
Start with the current outstanding principal, the fixed note interest rate and the number of scheduled payments remaining. This calculator derives the principal-and-interest payment that amortizes that balance over the remaining term. Use the interest rate from the note, not APR: APR can include fees that are not the rate applied to the monthly principal balance.
For monthly rate i and n remaining payments, payment = balance × i ÷ [1 − (1 + i)−n]. At a zero interest rate, payment is balance ÷ n. Escrow, homeowners insurance, property tax and mortgage insurance are excluded from that payment.
A lump sum scheduled for month 0 reduces principal immediately, before the first interest charge. A lump sum after N payments is applied just after payment N, reducing interest from the following month. Each regular month charges interest on the opening balance and then subtracts the scheduled payment plus any extra principal. The final payment is capped at the amount owed.
Example: $50,000 paid on a $300,000 mortgage
Assume $300,000 remaining at a fixed 6% interest rate with 240 monthly payments left. The calculated payment is approximately $2,149.29 per month. With no extras, modeled remaining interest is about $215,830.36.
Apply $50,000 immediately and keep the same payment. With no additional monthly principal and no fee, the loan ends in 175 months, saving 65 months and approximately $90,364.20 in interest. The final payment is smaller than the regular payment. This example uses unrounded intermediate calculations, so an actual servicer’s cents-based schedule can differ slightly.
Moving the same lump sum later generally leaves more principal accruing interest beforehand. Use the timing input to compare a payment now with a future bonus or sale proceeds. Do not assume the delayed cash earns no return in real life; this mortgage-only model does not compare investment alternatives.
Paying principal is different from recasting
This calculation keeps the scheduled principal-and-interest payment unchanged after the lump sum, which shortens the loan. A recast, when available under the loan’s terms, recalculates the payment on the reduced balance. A refinance changes the loan itself. Neither process is modeled here.
If your actual required payment differs materially from the calculated payment, check the remaining term, outstanding principal and loan structure. Modified loans, adjustable rates, interest-only periods, balloon payments and irregular payment schedules need a different model.
The “lump sum only” result separates the one-time payment from the optional recurring extra. If recurring extras pay the loan off before the scheduled lump sum, the unused lump sum is reported and its entered fee is not charged. Payments are never allowed to reduce principal below zero.
Check fees and what the savings figure means
Some loans impose a prepayment penalty, and a large principal payment can be relevant to those terms. Check the loan documents and servicer instructions, including how to designate an extra payment for principal. Enter any applicable one-time fee so the result deducts it from the modeled interest savings.
Interest saved is the difference in future mortgage interest. The lump sum itself is principal repayment, not a fee or an additional interest saving. The net figure does not value liquidity, future investment returns, mortgage-interest tax deductions or changes in insurance costs. At a 0% loan rate, earlier repayment saves time but no interest; an entered fee can therefore make net savings negative.
For recurring overpayments on a newly modeled loan, use the early mortgage payoff simulator. To prioritize several loans, use the debt payoff calculator. Obtain a servicer payoff quote before making a final payment.
Frequently asked questions
Does the lump sum lower my monthly payment?
Not in this model. The calculated scheduled payment stays the same and the loan ends earlier. A recast or refinance requires a different agreement and calculation.
What if my lump sum exceeds the remaining principal?
Only the amount needed to pay off the remaining principal is applied. The calculator reports the unused portion instead of creating a negative balance.
Should I enter the total mortgage bill including escrow?
No. Enter principal, interest rate and remaining months. The tool calculates principal and interest only; taxes, insurance and escrow are outside the amortization model.
Sources & model notes
Calculator, formulas and examples by FinancialDepth, checked October 23, 2026. Sources explain the underlying account or product rules; numerical projections come from the assumptions shown on this page. See our methodology and limitations.
Continue planning
- Compare recurring extra mortgage payments
- Prioritize multiple debts
- Plan a future lump-sum savings goal
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