Mortgage Extra Payment Calculator
What does an extra payment each month really buy you?
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Mortgage Extra Payment Calculator by TheCalcTools
How the Mortgage Extra Payment Calculator works
Enter the remaining balance, rate and years.
The regular payment comes from the standard amortization formula.
Adding extra shortens the term; the number of payments is found by solving the annuity formula for n.
The formula
Worked example
Using the default values shown in the calculator:
| Loan balance | $300000 |
|---|---|
| Interest rate (APR %) | 6.5 % |
| Remaining term (years) | 30 |
| Extra payment per month | $200 |
- Regular payment = $1,896.20.
- Adding $200 a month pays the loan off in 276.3 months, saving 7.0 years and about $103,450 of interest.
Result:
| Regular monthly payment | $1,896.20 |
|---|---|
| Months to pay off with extra | 276.3 |
| Time saved (years) | 7.0 |
| Interest without extra | $382,633 |
| Interest with extra (approx.) | $279,183 |
| Interest saved | $103,450 |
Frequently asked questions
Do extra payments go to principal?
Only if your lender applies them that way. Confirm that extra payments are applied to principal and that there is no prepayment penalty.
Is it better to invest the extra money?
It depends on your mortgage rate versus expected after-tax investment return, taxes and risk. Paying down a mortgage is a guaranteed return equal to the rate.
Sources and further reading
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This calculator gives estimates for information only. It is not financial advice, and your lender's or provider's figures will govern. Rates, fees and rules vary. See our disclaimer.