Mortgage Extra Payment Calculator
See exactly how much interest you save and how many years you shave off your mortgage by making extra principal payments each month. Ideal for homeowners who want to pay off their loan faster.
About this calculator
Every mortgage payment is split between interest and principal. In the early years, most of each payment covers interest, with only a small portion reducing the balance. When you make an extra principal payment, you reduce the outstanding balance faster, which in turn reduces the interest charged in every subsequent month. The standard monthly payment is: M = P × [r(1+r)ⁿ] / [(1+r)ⁿ − 1], where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of payments. With an extra monthly amount added, the calculator simulates each month's amortization, subtracting (M + extra − interest) from the balance until it reaches zero. Interest savings = total interest paid without extra payments − total interest paid with extra payments. Even modest extra payments can eliminate years from a 30-year mortgage and save tens of thousands of dollars in interest.
How to use
Example: $250,000 loan at 6.5% for 30 years. Standard monthly payment: M = 250,000 × [0.005417 × (1.005417)³⁶⁰] / [(1.005417)³⁶⁰ − 1] ≈ $1,580. Total interest without extra payments ≈ $318,800. Now add $200/month extra. The calculator runs month-by-month: each month, interest = balance × 0.005417; balance decreases by ($1,580 + $200 − interest). The loan is paid off in approximately 298 months instead of 360 — saving about 62 months and roughly $47,000 in interest.
Frequently asked questions
How much interest can I save by paying an extra $100 a month on my mortgage?
On a $250,000 mortgage at 6.5% for 30 years, paying an extra $100 per month can save approximately $24,000 in total interest and shorten the loan by about 3.5 years. The exact savings depend on your loan balance, interest rate, and how early in the loan term you begin making extra payments. Starting extra payments earlier produces greater savings because more of the loan's life remains ahead, and compounding interest is avoided on a larger outstanding balance.
What is the best way to make extra payments on a mortgage — monthly or lump sum?
Both strategies reduce interest, but lump-sum payments applied immediately reduce the principal balance right away, so interest savings begin accumulating from that moment. Regular extra monthly payments have a compounding benefit over time and are easier to budget for. If your lender allows it, you can also split your mortgage into bi-weekly payments, which results in one extra full payment per year without a large single outlay. Always confirm with your lender that extra payments are applied to principal and not held toward future scheduled payments.
Does paying extra on a mortgage principal reduce the monthly payment?
In most standard fixed-rate mortgages, extra principal payments do not reduce your required monthly payment — they shorten the loan term instead. Your scheduled payment stays the same, but a greater portion goes toward principal each month because the outstanding balance is lower. Some lenders offer a recast option, where after a significant lump-sum payment, they re-amortize the loan and lower your required monthly payment. You typically need to request a recast explicitly, and lenders may charge a small fee for the service.