Extra Mortgage Payment Calculator
Updated · By the CalculatorDash editorial team · How we check our maths
Quick answer
Paying extra goes straight to principal, so every later payment carries less interest. On a $300,000 balance at 6.5% with 30 years left, an extra $200 a month pays the loan off about 7 years early and saves roughly $103,000 in interest.
How this calculator works
A mortgage payment is fixed, but the split inside it is not. Early on most of each payment is interest because interest is charged on a large balance. Any extra money you send goes entirely to principal, which lowers the balance that next month's interest is charged on, and that saving compounds for the rest of the loan.
The calculator first works out your regular payment from the balance, rate and remaining term. It then finds how many months it takes to clear the same balance when you pay the regular amount plus your extra amount, and compares the total interest in both cases.
The earlier in the loan you start, the bigger the effect. An extra $100 in year two of a 30-year loan saves far more than the same $100 in year twenty-five, because it removes interest that would otherwise have been charged for decades.
Before you prepay, check that your lender applies extra money to principal rather than to next month's payment, and that there is no prepayment penalty. In India most floating-rate home loans cannot charge a prepayment penalty to individual borrowers.
The formula
- Regular payment
- balance × r ÷ (1 − (1 + r)^−n), with r = rate ÷ 12 and n = months left
- New term
- months = −ln(1 − r × balance ÷ (payment + extra)) ÷ ln(1 + r)
- Interest saved
- (payment × n − balance) − ((payment + extra) × new months − balance)
Worked example
A $300,000 balance at 6.5% over 30 years has a regular payment of about $1,896 and costs about $382,600 in interest. Adding $200 a month clears it in about 23 years instead of 30, and total interest falls by roughly $103,000.
Tips
- 01Ask your lender to mark extra payments as 'principal only' so they aren't held as a prepayment of next month.
- 02If you have credit card or other higher-rate debt, pay that off first; it is a better guaranteed return.
- 03Keep an emergency fund before prepaying. Money sent to a mortgage is hard to get back out.
- 04Biweekly payments (half a payment every two weeks) work the same way: they add one extra monthly payment a year.
Frequently asked questions
Is it better to pay extra on the mortgage or invest?
Prepaying earns a guaranteed return equal to your mortgage rate. Investing may earn more over long periods but with risk. Many people split the difference once they have an emergency fund and are saving for retirement.
How much does one extra payment a year save?
On a typical 30-year loan at 6–7%, one extra full payment a year shortens the loan by about five to six years and saves tens of thousands in interest.
Does paying extra lower my monthly payment?
Usually not. The payment stays the same and the loan ends sooner. Some lenders will 'recast' the loan after a large prepayment to lower the payment instead.
Can I use this for car loans or personal loans?
Yes. Any fixed-rate amortising loan works the same way. Enter the remaining balance, rate and time left.