Prepay Curve Calculator
See the true value of early mortgage payments
We model this as $1,200/year (12 monthly payments) at the start of each year.
A smarter way to pay extra
Pay more early and less later: start at $891/mo and lower it by $6.94 each month until it reaches $0. You’d be paid off in 23.6 years and save $174,463 in interest.
Your flat $100/mo saves $57,325 and pays off in 27.5 years.
The button sets only the starting amount. For the month-by-month plan, see the Mortgage Payoff calculator.
~50% of total prepayment value is captured by year 7.
The Early Payment Advantage
88× more valuable
$1,200 prepaid in Year 1 saves $5,964
$1,200 prepaid in Year 30 saves just $68
Your Prepay Curve: Value Per Dollar by Year
Why Early Payments Save More
Each early dollar of extra principal does the work of 88 late dollars — interest on it is eliminated for the remaining 29+ years.
An early dollar saves more than a late one — when you pay matters. Today’s rates →
Altgage Inc. NMLS #2447252 | 100 Cambridge St, Floor 14, Boston, MA 02114|
Why the Prepay Curve Drops So Fast
Every dollar of extra principal you pay early eliminates all the interest that dollar would have accrued for the rest of the loan. The graph above shows that effect in dollars of interest saved per dollar of extra payment, at each year of your mortgage. Timing matters far more than amount — the same $1 paid in year 1 vs year 20 can differ by 10× or more.
How to read the curve
The y-axis is interest saved per dollar of extra payment. A value of $4.50 means every $1 you pay extra in that year wipes out $4.50 in future interest. The curve falls because every year that passes is one less year of compounding the savings. By the last few years of the loan, you're saving cents instead of dollars per dollar paid.
The first few years carry the math
On a typical 30-year loan, the first 5 years contain most of the prepayment value. By year 15, each extra dollar saves only 30–60 cents — and by year 25, almost nothing. If you ever intend to prepay, doing it now beats doing it later by a wide margin. Half the value of a 30-year prepayment program is captured in the first ~7 years.
When prepaying is the right move
Your loan rate is above what you could safely earn elsewhere (e.g., a 7% mortgage when a HYSA pays 4%). Your 401(k) match and Roth IRA are already maxed. No higher-interest debt remains. You have a healthy emergency fund. And your mortgage interest deduction is small enough (or you take the standard deduction) that accelerating payoff doesn't cost you a meaningful tax break.
When NOT to prepay
Sub-4% loan rate while equities have historically returned 7–10% — investing the difference beats prepaying over long horizons. Limited liquidity or no real emergency fund (extra principal is the worst kind of illiquidity). Higher-interest debt elsewhere — credit cards, personal loans, even some student loans. Or your mortgage interest is a sizeable itemized deduction you'd lose by paying down the loan faster.