Extra Mortgage Payment Calculator
Discover how much interest you save and how many months sooner you pay off your mortgage by adding extra principal payments. Includes a side-by-side payoff chart comparing original vs. accelerated schedules.
How to use this tool
- Enter mortgage balance, annual interest rate, remaining term and extra monthly payment in the fields above.
- Results update instantly as you type — or click Calculate.
- Read your interest saved and the full breakdown beneath it.
Even a small extra monthly payment chips away at your principal faster, reducing the interest that accumulates and shortening your loan. The earlier you start, the larger the effect.
⚠ This tool provides general estimates for education only and is not financial, tax or legal advice. Figures may not reflect your situation — verify with a qualified professional.
Formula
Standard monthly payment: PMT = P × r × (1 + r)n / ((1 + r)n − 1)
Where P = remaining principal, r = monthly rate (annual rate ÷ 12), n = remaining months. An extra payment reduces the principal every month, shortening the amortization schedule. Interest saved = total interest (base schedule) − total interest (accelerated schedule).
How it works
This calculator runs two full amortization schedules side by side: one with your regular payment only, and one with the regular payment plus your chosen extra principal amount. It accumulates interest and principal month by month until the balance reaches zero, then compares total interest paid and loan duration between the two runs.
Results assume the extra payment is applied entirely to principal each month and that the interest rate stays fixed. The base payment is recalculated from the inputs you provide, not taken from a pre-existing statement, so rounding differences of a few dollars are normal.
Worked example
- Inputs: $12,000 balance, 0% annual rate, 12-month term, $0 extra payment.
- Monthly payment = 12,000 / 12 = $1,000 (zero-rate formula: P ÷ n).
- With no interest and no extra payment, both schedules are identical: 12 months, $0 total interest.
- Interest saved = $0 − $0 = $0; months cut = 12 − 12 = 0.
Interest saved: $0 | Months cut from loan: 0 | New payoff in months: 12
Common mistakes to avoid
- Assuming extra funds automatically reduce principal — lenders must be explicitly instructed to apply additional payments as principal-only or they may credit future interest.
- Comparing gross interest saved without accounting for the opportunity cost of that cash invested elsewhere, which can overstate the benefit of prepaying.
- Entering a one-time lump sum in the monthly extra field, compounding the savings far beyond what a single payment achieves.
Key terms
- Amortization
- The process of paying off a loan through scheduled, periodic payments that cover both interest and principal over a set term.
- Extra principal payment
- Any amount paid beyond the required monthly payment that is applied directly to the loan balance, reducing future interest charges.
- Monthly interest rate (r)
- The annual interest rate divided by 12, used to calculate the interest portion of each monthly payment.
- Interest saved
- The difference in total interest cost between the original amortization schedule and the accelerated schedule with extra payments.
- Payoff acceleration
- The reduction in loan term (measured in months) achieved by making extra principal payments each month.
Frequently asked questions
- Should I pay extra principal or invest the money?
- It depends on your mortgage rate vs. expected investment return. If your mortgage rate is higher than after-tax investment returns, paying down debt is the better risk-adjusted move.
- How do I make sure extra payments reduce principal?
- Tell your lender to apply any extra amount to principal, not the next month's payment. Most servicers allow this online or by note on a check.