Mortgage Lump Sum Payment Calculator
A lump sum applied to your mortgage principal reduces the balance in one move, cutting both the remaining term and total interest owed. The earlier you make the payment, the greater the savings because the reduced balance compounds over more years. Enter your details and the lump sum above to see the impact.
Your loan and extras
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instead of —
- Monthly payment
- $0.00
- Time saved
- —
- Interest without extras
- $0
- Interest with extras
- $0
- Interest saved
- $0
Extra payments only help if the servicer applies them to principal. Say so in writing when you send one.
Why Timing Magnifies the Effect
A lump sum applied early in a mortgage has an outsized impact. In the first years of a 30-year amortisation schedule, the majority of each monthly payment covers interest rather than principal. A large principal reduction at that stage means every subsequent payment allocates more to principal and less to interest — a shift that compounds across the remaining term.
On a $300,000 loan at an illustrative 7 percent rate, a $30,000 lump sum in year three could save more than twice the interest of the same payment in year fifteen. By year fifteen the balance is already substantially lower and fewer years remain for the reduced interest to accumulate. The calculator shows this difference when you adjust the payment date.
This does not mean a later lump sum is worthless — any principal reduction saves interest — but borrowers who receive a windfall early in their mortgage should weigh the mortgage paydown against other uses before the timing advantage fades.
Recast or Shorter Term
After a lump sum, borrowers typically face two paths. The default is to keep the original monthly payment, which shortens the remaining term. Every month the same payment covers the interest on a smaller balance, so more flows to principal and the loan finishes ahead of schedule.
The alternative is a mortgage recast. The servicer recalculates the monthly payment based on the new lower balance, the original rate, and the remaining term. The monthly obligation drops, but the payoff date stays roughly the same. Servicers usually charge a modest administrative fee and may require a minimum lump sum — amounts that vary by lender.
Recast suits borrowers who want immediate cash-flow relief. Keeping the original payment suits those focused on eliminating the mortgage early. The recast calculator models the lower-payment path, and the extra-payment calculator shows ongoing acceleration if you plan to add smaller amounts each month instead of a single lump sum.
Recast availability and fees depend on your servicer and loan programme. Not all loan types are eligible for recast.