Prepayment Penalty Calculator
Cost of paying off a mortgage early.
Calculate the prepayment penalty on a mortgage based on remaining balance and penalty percentage. Enter balance being repaid and see the result instantly.
What this tool does
Enter remaining balance and penalty percentage. The tool shows the prepayment penalty amount.
Enter Values
Formula Used
Spotted something off?
Calculations, display, or translation — let us know.
Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
Prepayment penalties are common on fixed-rate mortgages, especially in early years. Typical pattern: 2% in year one, stepping down to 1% by year three, zero thereafter. A 250,000 balance with a 2% penalty = 5,000 cost to exit the mortgage early. Knowing this before remortgaging or selling lets you time the exit to minimise the hit.
Run it with sensible defaults
Using balance being repaid of 250,000, penalty rate of 2%, the calculation works out to 5,000.00. Nudge the inputs toward your own situation and the output recalculates instantly. The defaults are meant as a starting point, not a recommendation.
The levers in this calculation
The inputs — Balance Being Repaid and Penalty Rate — do not pull with equal force. Not every input has equal weight. Flip one at a time toward extreme values to feel which ones move the needle most for your situation.
How the math works
Balance × penalty rate. Standard mortgage early-repayment charge structure. Some mortgages use different formulas (e.g., interest-based); verify against your mortgage offer. The working is transparent — you can verify every step yourself in the formula section below. No black box, no opaque "proprietary model".
What the headline rate hides
Lenders quote a rate; what you pay is a blend of that rate, fees, insurance, and any early-repayment penalty built into the product. The figure here isolates the core interest cost so you can compare like-for-like across deals — then add the other costs separately before signing anything.
What this doesn't capture
The figure excludes arrangement fees, valuation costs, legal fees, insurance, and any early-repayment charges — those can add several thousand to the headline cost. Rate changes at renewal for fixed-term deals will shift the picture further. Use this for the core interest/principal math and add the other costs on top.
Prepayment penalty produces a cost based on the inputs provided.
Inputs
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
Balance × penalty rate. Standard mortgage early-repayment charge structure. Some mortgages use different formulas (e.g., interest-based); verify against your mortgage offer.
References
Frequently Asked Questions
Do all mortgages have them?
How do I check my rate?
Are they negotiable?
Worth paying to remortgage?
Related Calculators
Mortgage Overpayment Calculator
Calculate interest saved and months cut from regular mortgage overpayments above standard payment. Enter mortgage principal and see the result instantly.
Mortgage Points Calculator
Calculate cost of mortgage points and resulting monthly payment reduction. Enter loan amount and points paid to see upfront cost and monthly saving.
Early Mortgage Payoff Calculator
Calculate years and interest saved by making extra mortgage payments. See impact of regular overpayments. Enter mortgage balance and see the result instantly.
More Mortgage Calculators
Mortgage
15 vs 30 Year Mortgage Calculator
Compare 15-year versus 30-year mortgage showing interest savings and monthly payment difference. Enter loan amount and 15-year rate for an instant result.
Mortgage
Adjustable Rate Mortgage Calculator
Calculate ARM initial and reset payments. See the payment increase when the fixed period ends. Enter loan amount and initial rate for an instant result.
Mortgage
ARM vs Fixed Rate Mortgage Calculator
Compare ARM initial payment vs fixed-rate mortgage. See 5-year initial savings and the rate gap. Enter loan amount and arm initial rate for an instant result.
Mortgage
Balloon Mortgage Calculator
Calculate balloon mortgage payment due. See monthly payment, total paid before balloon, and final lump sum. Enter loan amount and see the result instantly.
Mortgage
Biweekly Mortgage Payoff Calculator
Calculate years saved by switching to biweekly mortgage payments. See total interest saved. Enter mortgage balance and interest rate for an instant result.
Mortgage
Blended Rate Mortgage Calculator
Calculate the blended (weighted-average) interest rate across two mortgage loans of different balances and rates. Free and educational.
Explore Other Financial Tools
Utilities
Percentage Increase Calculator
Calculate the percentage increase between two values instantly. Enter original value and new value for an instant result.
Investing
Annual Investment Return Calculator
Calculate annualised rate of return from start value, end value, and years held. Shows annualised return from the values you enter.
Financial Health
Accounting Software Cost Calculator
Calculate total accounting software cost over years including setup. Enter subscription and setup hours for an instant result.