Extra Payment Calculator
See how extra monthly mortgage payments shorten your loan term and how much interest you save.
Small extra payments compound into big savings because every extra dollar goes straight to principal. Enter your balance, rate, term, and the extra amount you can pay monthly to see your new payoff date, months and years saved, total interest with and without the extra payments, and exactly how much interest you keep.
How to use this calculator
- Enter your current loan balance, interest rate, and original term.
- Enter the extra amount you can pay toward principal each month.
- Click Calculate to see your new payoff timeline and interest saved.
- Adjust the extra amount to find a plan that fits your budget.
The formula
Each month: interest = balance × monthly rate; extra payments reduce principal directly, shortening the amortization schedule.
Worked example
On a $300,000 mortgage at 6.5% for 30 years ($1,896.20/month), adding $200 extra each month pays the loan off in 277 months instead of 360 — saving 83 months (6.9 years) and $103,448.79 in interest.
Frequently Asked Questions
How do extra mortgage payments save interest?
Each mortgage payment covers that month's interest first, with the rest reducing principal. Extra payments go entirely to principal, which shrinks the balance faster, so every future month accrues less interest. The effect compounds: early extra payments save far more than later ones because they reduce interest for the longest time.
Is it better to make extra payments or invest the money?
It depends on the after-tax return comparison. Extra mortgage payments earn a guaranteed return equal to your mortgage rate — paying down a 6.5% loan is like earning 6.5% risk-free. Investing might beat that long-term but carries risk and volatility. Many people split the difference, and the right answer depends on your risk tolerance and time horizon.
Should I make one extra payment a year or pay a little monthly?
Biweekly-equivalent or monthly extra payments beat one annual lump sum slightly, because the principal drops sooner and accrues less interest in the meantime. But the difference is small — the habit matters more than the schedule. Pick whichever you will actually stick with, and make sure extra payments are applied to principal.
Will my lender penalize extra payments?
Most modern mortgages have no prepayment penalty, but some do, especially certain non-qualified or investment-property loans. Check your note before accelerating payments. Also confirm with your servicer that extra amounts are applied to principal rather than treated as early future payments.
How much extra should I pay?
Even $100-$200 extra per month makes a dramatic difference on a 30-year loan — $200 extra on a $300,000 loan at 6.5% saves over $100,000 in interest and pays it off nearly 7 years early. Start with what your budget allows comfortably; you can increase it later. An emergency fund comes first, though.