Extra Payments Calculator
See how extra payments can help you pay off your mortgage faster and save thousands in interest. Calculate your potential savings and new payoff date.
Calculate Your Extra Payment Savings
Enter your loan details below to see how extra payments can reduce your interest and payoff time
Extra Payments Calculator
Payment Comparison
Calculator Disclaimer
This calculator provides estimates based on the information you enter and current market conditions. Actual savings and results may vary based on:
- Your loan terms and conditions
- Payment application timing
- Lender prepayment policies
- Interest rate changes
- Loan type and features
- Prepayment penalties
Please consult with one of our mortgage experts to understand how extra payments will affect your specific loan and to verify there are no prepayment penalties. The results shown are for informational purposes only and do not constitute financial advice.
Benefits of Making Extra Payments
Discover how extra payments can help you save money and pay off your mortgage faster
Save on Interest
Reduce your principal balance faster, which means less interest accrues over time. Even small extra payments can save thousands in interest.
Pay Off Faster
Every extra payment reduces your principal, which shortens your loan term. Pay off your mortgage years earlier and become debt-free sooner.
Build Equity Faster
Extra payments increase your home equity more quickly, giving you more financial flexibility and options for future needs.
Payment Strategies
- 💰Round up your monthly payment to the nearest $100
- 📅Make one extra payment annually (13 payments per year)
- 💵Apply tax refunds and bonuses directly to principal
- 📈Add a fixed amount monthly (e.g., $50, $100, $200)
- 🎯Increase payments when you get a raise
- 🔄Switch to biweekly payments (26 half-payments = 13 full payments)
How It Works
Principal Reduction
When you make extra payments, the additional amount goes directly toward reducing your principal balance. This reduces both your remaining balance and the total interest you'll pay over the life of the loan.
Example Savings
On a $300,000 mortgage at 6.5% interest over 30 years:
- Paying an extra $200/month saves over $60,000 in interest
- Pays off your mortgage 5 years earlier
Important Note
Always specify that extra payments should be applied to principal, not to future payments. Check with your lender to ensure there are no prepayment penalties.
Frequently Asked Questions
How do extra mortgage payments work?
When you make extra payments on your mortgage, the additional amount goes directly toward reducing your principal balance. This reduces both your remaining balance and the total interest you'll pay over the life of the loan, helping you pay off your mortgage faster.
How much can I save with extra payments?
The amount you save depends on your loan amount, interest rate, and how much extra you pay. For example, on a $300,000 mortgage at 6.5% interest, paying an extra $200 per month could save over $60,000 in interest and pay off your mortgage 5 years earlier.
Should I make extra payments or invest the money?
It depends on your financial situation and goals. If your mortgage rate is higher than your expected investment returns, extra payments may be better. If you can earn more investing than your mortgage rate, investing might be preferable. Consider your risk tolerance and financial goals.
Are there prepayment penalties?
Most modern mortgages don't have prepayment penalties, but it's important to check your loan documents. Prepayment penalties are more common on certain loan types or older mortgages. Always verify with your lender before making extra payments.
How should I apply extra payments?
When making extra payments, specify that the additional amount should be applied to principal, not to future payments. Some lenders may automatically apply extra payments to future installments unless you specify otherwise. Always confirm with your lender how extra payments are processed.
What's the best strategy for extra payments?
Common strategies include: rounding up your monthly payment, making one extra payment annually, applying tax refunds or bonuses to principal, or adding a fixed amount monthly. The best strategy depends on your cash flow and financial goals.
Can I make extra payments on any mortgage?
Most mortgages allow extra payments, but some loan types may have restrictions. FHA, VA, and conventional loans typically allow extra payments. Some specialized loans or mortgages with prepayment penalties may have limitations. Check your loan terms.
Will extra payments reduce my monthly payment?
No, extra payments don't reduce your regular monthly payment amount. They reduce your principal balance, which means you'll pay less interest over time and pay off your loan faster. Your monthly payment stays the same unless you refinance or recast your loan.
Ready to Pay Off Your Mortgage Faster?
Understanding how extra payments work is just the beginning. Our mortgage experts can help you develop a strategy to save money and pay off your mortgage faster.