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Mortgage calculator with extra payments

The interest saved and the time cut when you pay a little more.

Reviewed by Victor Yuki Matusita on . First published .

Your numbers stay on your device
$
%
$

Interest saved

$103,450

With the extra payments the loan is paid off in 23 years 1 month instead of 30 years, 6 years 11 months sooner, and you save $103,450 of interest.

  • Principal $300,000 · 52%
  • Interest with extra payments $279,187 · 48%

Loan term, more extra payments and costs

years
$

Paid with every 12th payment.

$
$
$
$

Private mortgage insurance, usually asked with less than 20% down.

$
Without extra payments
Interest
$382,637
Paid off in
30 years
Total paid
$682,637
With extra payments
Interest
$279,187
Paid off in
23 years 1 month
Total paid
$579,187

B pays the loan off 6 years 11 months sooner and saves $103,450 of interest.

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Schedule with extra payments

How to use the extra payments calculator

  1. Enter the home price, the down payment, the rate and the term of the mortgage.
  2. Type how much extra you could pay every month.
  3. Add an extra once a year or a single lump sum with the payment number it goes with, if you plan one.
  4. Compare the loan without and with the extra payments, and save the new schedule.

Why an extra payment saves interest

Interest is charged on the balance. An extra payment lowers the balance at once, so every later month charges a little less interest, and more of the same regular payment goes to principal. The effect adds up: early extras save more than late ones, because they shorten more months of interest.

The regular payment doesn't change. What changes is the last payment number: the loan simply ends sooner.

Before you pay extra

Ask your servicer to apply the extra to principal, and check that the loan has no prepayment penalty. Some people keep an emergency fund or pay off higher-rate debts first; the debt payoff calculator compares those debts.

How the savings are worked out

The formula

The regular payment is M = P × r × (1 + r)^n ÷ ((1 + r)^n − 1). Each month: interest = balance × r rounded to the cent, payment = M + the extras of that month, and the new balance is the old one minus (payment − interest), until a last payment closes it.

Months saved = payments without extras − payments with extras. Interest saved = interest without extras − interest with extras.

Assumptions

  • The rate stays the same for the whole term: a fixed-rate loan.
  • Interest is charged once a month at the yearly rate divided by 12, on the balance, and rounded to the cent.
  • Property tax and insurance stay at the yearly amounts you enter. In real life they can change every year.
  • PMI and HOA dues stay at the monthly amounts you enter. Here PMI doesn't stop on its own; on most loans it can end once the balance falls to 78% to 80% of the home's original value.
  • No closing costs, points or lender fees are included.
  • Every extra payment goes straight to the balance; the regular payment stays the same, so the loan ends sooner. The extra once a year is paid with every 12th payment.

Worked example

This is the example the calculator opens with, worked out by the same engine you use above.

You enter
Home price$375,000.00
Down payment20%
Rate6.5%
Extra every month$200.00
Loan term30 years
Extra once a year$0.00
One extra payment$0.00
With payment number1
Property tax per year$4,500.00
Home insurance per year$1,500.00
PMI per month$0.00
HOA dues per month$0.00
You get
Principal and interest$1,896.20
Monthly payment with taxes, insurance and fees$2,396.20
Interest saved$103,450.19
Months saved83 months
Payments with the extra277 payments
Payments without the extra360 payments

With the extra payments the loan is paid off in 23 years 1 month instead of 30 years, 6 years 11 months sooner, and you save $103,450 of interest.

Sources

Read the guide: How extra payments shorten a mortgage

Educational tool

This calculator is an educational tool, not financial advice. Your loan contract says how extra payments are applied.

Questions about extra mortgage payments

Is it better to pay extra monthly or once a year?

The same total paid earlier saves a little more, because it lowers the balance sooner. Try both in the calculator with the same yearly amount.

Does an extra payment lower my monthly payment?

No. On a regular fixed-rate loan the payment stays the same and the loan ends earlier. A recast, which some lenders offer for a fee, is a different thing.

Can a lender charge me for paying early?

Some loans have a prepayment penalty. The Loan Estimate and Closing Disclosure say whether yours does.

Does the lump sum have to be in the first year?

No. Pick the payment number it goes with; a lump sum later in the loan saves less interest than the same amount early on.

Privacy

Your numbers stay on your device. The calculator runs in your browser, so nothing you type is sent anywhere, and the link you copy keeps the numbers after the #, a part of the address your browser never sends.