Mortgage Curtailment Payoff Calculator 2027
Calculate mortgage curtailment 2027 — apply lump-sum principal payment to shorten loan WITHOUT changing monthly payment. Saves interest by trimming term not recasting.
Curtailment vs Recast
Curtailment: extra principal payment, same monthly payment, shorter term. Recast: extra principal payment, lender recalculates LOWER monthly payment, same term length. Curtailment saves more interest.
How to Apply Curtailment
Send check to servicer with note 'Apply to Principal Only'. Confirm in writing. If you pay through bill-pay, set up a separate payee labeled 'principal only'. Watch escrow account doesn't absorb it.
Opportunity Cost Analysis
Compare interest saved % vs expected investment return. If mortgage = 6.25% and stock market expected = 7-10%, investing wins long-term. If mortgage > 7% and you're risk-averse, curtailment wins.
Best Timing
Early in loan saves the most interest (when balance highest). A $15k payment in year 5 saves much more than $15k in year 25. Compound interest works in reverse for mortgages.
Source: cfpb.gov mortgage payoff disclosure. Last updated: May 2026.
Frequently Asked Questions
Will curtailment lower my next month's payment?
No. Standard curtailment doesn't reset payment. You make the SAME monthly payment but each future payment has more going to principal because balance is lower.
Should I curtail or invest?
Math: if expected return > mortgage rate, invest. Behavioral: if you'd spend the cash instead, curtail (forced saving). Hybrid: 50/50 split is reasonable.
How is curtailment taxed?
Not taxed — it's paying back YOUR debt with already-taxed money. But you LOSE mortgage interest deduction faster (less interest over time). Most don't itemize anyway post-TCJA.