Estimate your payoff
Enter the current principal, the interest rate, the date interest is paid through, and your target payoff date. Add a penalty or escrow shortage if they apply.
Enter your loan details to calculate.
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Mortgage Payoff Calculator
Estimate your loan payoff including the daily interest that accrues until the loan is paid, plus any prepayment penalty or escrow shortage. Always request a written payoff letter for the binding figure. This is a planning tool.
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Per-diem interest
Mortgage interest accrues every day, so the payoff is not just the principal. The per-diem is the principal times the annual rate divided by 365, multiplied by the days from the last paid date to the payoff date. A few days of delay can change the figure, which is why payoff letters carry a good-through date.
How a mortgage payoff is calculated
A payoff is the principal balance plus interest that has accrued since the last date interest was paid through, plus any fees the loan allows. Because interest accrues daily, the calculation uses a per-diem figure equal to the principal times the annual rate divided by 365. Multiply the per-diem by the number of days to the payoff date and add it to the principal.
Some loans add a prepayment penalty or require an escrow shortage to be settled, and a few subtract an escrow surplus that is refunded after closing. Because the exact figure depends on the servicer and the date, always request a written payoff letter, which states the amount and the date through which it is good.
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Mortgage payoff FAQs
What is per-diem interest on a payoff?
Per-diem is the daily interest on the loan, equal to the principal times the annual rate divided by 365. Because interest accrues every day until the loan is paid, the payoff includes per-diem interest from the last paid date to the payoff date.
Why is my payoff higher than my balance?
The balance is the principal, while the payoff adds the interest that accrued since your last payment plus any penalty or escrow shortage. The longer the gap to the payoff date, the more per-diem interest is added.
Do I still need a payoff letter?
Yes. This is an estimate. The binding figure comes from the servicer in a written payoff letter that states the exact amount and the date through which it is good. Request one before closing.
What is a prepayment penalty?
It is a fee some loans charge for paying off early. Most modern owner-occupied loans do not have one, but some loans do. Check your note or ask the servicer, and add any penalty to the payoff estimate.
This calculator is general information for Chicago-area owners, buyers, and investors. It is not legal, tax, lending, appraisal, or brokerage advice, and rates or rules can change. Verify figures with the appropriate professionals before money moves or documents are signed. Always obtain a written payoff letter from your loan servicer for the binding amount and good-through date.