Prepayment Penalty Calculator

About this calculator

Lenders typically write prepayment penalties one of two ways: as a declining percentage of the remaining balance (common step-down schedules go something like 3%-2%-1% across the first three years, then 0%), or as a flat number of months of interest on the payoff amount, similar to how many mortgage and commercial loan penalty clauses are worded. This calculator applies whichever method your loan uses to the balance and terms you enter.

Homeowners and business borrowers use it before refinancing or selling to see whether the interest they'd save is worth the penalty they'd pay, while mortgage brokers and financial advisors use the same math to compare payoff scenarios across competing loan offers for a client.