Mortgage Extra Payment Calculator
Work out what paying extra towards the principal actually buys you: a payoff date, the interest that never gets charged, and how much of that saving each extra dollar is responsible for.
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What an extra payment actually does
Every dollar paid above the scheduled amount goes straight to principal. That does two things at once: it removes a dollar of debt, and it removes every future interest charge that dollar would have carried for the rest of the term. The second effect is much larger than the first, and it is why $250 a month can take eight years off a mortgage.
The calculator shows this as a ratio — dollars of interest avoided per dollar of extra principal. Early in a 30-year loan at a normal rate, that ratio is usually somewhere above 1.5, meaning each extra dollar cancels more than its own value in future interest.
Why this is a separate page from the mortgage calculator
The mortgage calculator answers a question you ask before buying: what will this cost per month. This one answers a question you ask years later, holding a statement: what happens if I send more.
The inputs are different because of that. There is no home price here and no down payment. What matters is the balance today, the rate on the note, and how many years are left — the loan's history is sunk, and the decision in front of you only concerns what remains.
How the schedules are compared
Two payoffs are walked month by month from today's balance. The baseline makes only the scheduled payment. The accelerated one adds whatever extras you entered, in the months you entered them.
Each month, interest is charged at the monthly rate on the outstanding balance, the payment covers that first, and everything left over reduces the principal:
interest = balance × rate ÷ 12principal = payment − interest + extra
The final payment is trued up to whatever is left, so the balance lands exactly on zero rather than a few cents either side. The difference between the two walks — in months and in total interest — is the answer.
A worked example
A balance of $341,500 at 6.375% with 26 years left carries a principal-and-interest payment of about $2,283. Left alone, the remaining interest comes to roughly $370,000.
Add $250 a month, $1,000 every December, and a single $5,000 payment in the third month. The loan clears in about 21 years instead of 26 — five years and change earlier — and the interest falls by roughly $86,000. Total extra principal paid over those years is about $73,000, so each extra dollar cancelled more than a dollar of interest.
Note where the leverage is. The $5,000 lump sum in month three does far more work than the same $5,000 spread across the final five years, because it removes interest for the entire remaining term rather than the tail of it.
Whether prepaying is the right use of the money
Paying down a mortgage is a guaranteed, tax-free return equal to your interest rate. At 6.375%, that is a strong risk-free return, and no argument about market averages changes the fact that it is certain.
The trade is liquidity. Money in the house is not available for an emergency without selling or borrowing against it, and a servicer will not credit your prepayments against next month's obligation. Higher-rate debt and an unfunded emergency fund both come first; so does capturing an employer retirement match, which is an immediate return no mortgage rate approaches.
What this does not cover
- Escrow. Property tax and insurance are unaffected by prepaying and are excluded from both schedules.
- Recasting. Some servicers will re-amortize after a large payment, lowering the monthly amount instead of shortening the term. That is a different outcome and is not modelled here.
- Mortgage insurance. Extra payments can end PMI early; the PMI calculator covers that separately.
- Tax treatment. Reducing mortgage interest reduces any interest deduction you claim, which slightly offsets the saving for itemizers.
If your rate is high, compare prepaying against a refinance before committing to either. See our methodology for how these tools are built and tested.
Frequently asked questions
Is it better to pay extra every month or one lump sum a year?
Monthly wins slightly, because each payment starts avoiding interest sooner. Twelve payments of $250 beat one payment of $3,000 in December by a few hundred dollars over the life of a typical mortgage.
The difference is small enough that whichever you will actually keep doing is the better plan. The calculator accepts both, so you can see the gap for your own loan.
Does making biweekly payments do the same thing?
Mostly, and for a reason that is often misdescribed. Paying half the mortgage every two weeks means 26 half-payments a year, which is 13 full payments rather than 12 — one extra payment a year, arriving in pieces.
Almost the whole benefit is that extra payment, not the timing. Entering one-twelfth of your payment in the "extra each month" field models it closely, and avoids the setup fee some servicers charge for a biweekly programme.
Will my monthly payment go down if I pay extra?
No. The payment is fixed by the original amortization, so extra principal shortens the loan rather than shrinking the instalment. You owe the same amount next month.
The exception is recasting: some servicers will re-amortize the loan over the remaining term after a large payment, which does lower the payment. It usually costs a few hundred dollars and has to be requested.
Why does the calculator ask for the remaining term rather than the original one?
Because the decision is about the loan you have, not the loan you took out. The years already paid are sunk, and the interest already charged cannot be recovered.
Entering the balance and years remaining also handles loans that have been recast, refinanced, or paid ahead — cases where the original schedule no longer describes the loan.
Should I pay off the mortgage or invest the money instead?
Prepaying returns exactly your mortgage rate, guaranteed and tax-free. Investing might return more and might not, and the difference between "might" and "will" is the whole argument.
In practice most people should do the higher-return, guaranteed things first — clear high-rate debt, capture any employer retirement match, hold an emergency fund — and then choose between prepaying and investing based on how much certainty they want. The ratio this calculator reports tells you what the certain option is worth.
How do I make sure the extra goes to principal?
Ask the servicer directly, in writing, and check the next statement. Left to itself, a servicer may apply an overpayment to the following month's instalment instead — which pays the loan ahead but saves almost no interest.
Most online portals now have a separate "additional principal" field. Use it rather than simply sending a larger payment.
Related calculators
This calculator is provided for general educational and estimation purposes only and is not financial or lending advice. It models principal and interest only. Confirm with your servicer that extra amounts are applied to principal, and check your note for any prepayment penalty before making a large payment.