Extra Mortgage Payment Calculator
Calculate how making extra payments toward your mortgage principal could save you money and help you pay off your mortgage faster.
Mortgage Details
Extra Payment Details
Original Mortgage
With Extra Payments
How to Use This Calculator
Our Extra Mortgage Payment Calculator is designed to help you understand how making additional payments can save you money and time on your mortgage.
Enter Your Mortgage Details
Start by inputting your current mortgage information: loan amount, interest rate, and loan term. Select your currency to see results in your preferred denomination.
Specify Your Extra Payments
Enter the amount you plan to pay extra toward your mortgage principal. Choose the frequency of these payments - monthly, quarterly, annually, or a one-time payment.
Calculate and Analyze Results
Click the calculate button to see how your extra payments will affect your mortgage. Review the new payoff time, total payment amount, and total interest savings.
Try Different Scenarios
Experiment with different extra payment amounts and frequencies to find a strategy that works best for your financial situation and goals.
How Extra Mortgage Payments Work
Understanding how extra payments affect your mortgage can help you make informed financial decisions.
The Power of Extra Payments
When you make extra payments toward your mortgage principal, you reduce the outstanding balance of your loan faster than scheduled.
- Your regular mortgage payment includes both principal and interest
- Extra payments go directly toward reducing the principal
- Less principal means less interest over the life of the loan
- This results in a shorter loan term and significant interest savings
The Math Behind the Savings
Our calculator uses detailed amortization calculations to show how extra payments affect your mortgage over time.
- Your mortgage uses a standard amortization formula
- Early in your loan, more of your payment goes toward interest
- Extra payments have a compounding effect on interest savings
- Even small extra payments can lead to significant savings over time
- $300,000 loan: Monthly payment of $1,520
- Total interest paid: $247,220 over 30 years
- With $200 extra monthly: Loan paid off in 23 years
- Interest savings: Approximately $70,000
Monthly Fixed Amount
Add a consistent amount to your regular payment each month. Even $50-$100 extra can make a significant difference over time.
Bi-weekly Payments
Make half your monthly payment every two weeks, resulting in 26 half-payments or 13 full payments per year instead of 12.
Annual Lump Sum
Apply tax refunds, bonuses, or windfalls directly to your mortgage principal once per year.
Best Practices for Extra Payments
To maximize the benefits of making extra mortgage payments, consider these important factors:
- Check for prepayment penalties in your mortgage agreement
- Specify that extra payments should be applied to principal
- Balance extra mortgage payments with other financial priorities
- Maintain an emergency fund before accelerating mortgage payments
- Consider the opportunity cost vs. investing the extra money elsewhere
Frequently Asked Questions
Will making extra payments save me money?
Yes, making extra payments toward your mortgage principal can save you a substantial amount in interest over the life of your loan. Since interest is calculated based on your remaining principal, reducing your principal faster leads to paying less interest overall.
How do I ensure extra payments go toward the principal?
When making extra payments, specify to your lender that the additional amount should be applied to the principal balance, not toward future payments. Most online payment systems have an option to designate extra payments as "principal only." If not, contact your loan servicer to clarify their process.
Are there penalties for paying off my mortgage early?
Some mortgages include prepayment penalties, which are fees charged if you pay off the loan before the end of the term. Check your mortgage agreement or contact your lender to determine if your loan has prepayment penalties and what conditions apply.
When is the best time to start making extra payments?
The sooner you start making extra payments, the more you'll save on interest. Since mortgages are typically front-loaded with interest payments, making extra payments early in your loan term will have the greatest impact on reducing both your principal balance and the total interest paid.
Should I make extra payments or invest instead?
This depends on your financial goals, risk tolerance, and current mortgage interest rate. If your mortgage rate is lower than what you could reasonably expect to earn from investments, investing might be preferable. However, paying off your mortgage offers guaranteed returns equal to your interest rate and provides peace of mind from reduced debt.
How much extra should I pay each month?
Even small extra payments can make a significant difference over time. Consider what fits comfortably within your budget after prioritizing emergency savings and retirement contributions. Our calculator can help you experiment with different payment amounts to find what works best for your financial situation.
Will extra payments change my monthly payment amount?
No, making extra payments doesn't change your required monthly payment amount. Instead, it reduces your loan term by paying down the principal faster, which means you'll pay off your mortgage sooner than scheduled.
How does the payment frequency affect my mortgage?
Different payment frequencies can significantly impact your mortgage. For example, bi-weekly payments (every two weeks) result in 26 half-payments per year, effectively making 13 monthly payments instead of 12. This alone can shorten a 30-year mortgage by about 4 years and save thousands in interest without increasing your payment amount.
Ready to save on your mortgage?
Now that you've calculated your potential savings from extra mortgage payments, it's time to put your plan into action. Take the next step toward financial freedom.