What this calculator does
It answers a simple question: if you send more than the required payment, when will the mortgage be gone, and how much interest will you avoid along the way?
Enter your current balance (from your statement), rate and the years left on the loan, or a new loan's amount and full term. Then add any mix of extra principal: a fixed amount every month, a sum once a year, or a one-time payment at a payment number you choose.
The results compare the regular schedule with yours: the new payoff time, the interest saved, how much extra you put in, and a schedule you can open month by month. Set a goal under More options and it works backward to the steady monthly extra that ends the loan by then.
Note that extra payments shorten the loan without lowering the required payment. Lowering the payment after a lump sum is a different move, a recast, covered by the recast calculator.
How the math works
Every month, the lender charges interest on the balance: the balance times one-twelfth of the annual rate. Your regular payment covers that interest first, and the rest reduces the balance. Extra principal skips the interest step and comes straight off the balance.
That is why a modest extra amount goes a long way. A dollar of principal repaid today never accrues interest again, and each month's lower interest leaves more of the regular payment for principal, so the savings compound. With a constant extra amount, the number of payments left has a closed form:
- n
- number of monthly payments until the balance is zero (round up)
- B
- current balance
- r
- monthly rate: the annual rate ÷ 12 (6% → 0.005)
- M
- regular principal-and-interest payment
- E
- extra principal added to every payment
The calculator builds the full schedule month by month instead, rounding interest to the cent the way a servicer does, which also handles yearly and one-time amounts. The two agree to within a payment.
The goal works in reverse: the standard payment formula gives the payment that retires your balance in the months you choose, and the extra needed is that payment minus your current one, rounded up by a cent so paying it does finish on time.
Worked example
Say you owe $250,000 at 6.5% with 25 years left, and you add $150 to every payment.
Worked example
- The regular payment that retires $250,000 over 300 months at 6.5% is $1,688.02. The monthly rate is 6.5% ÷ 12 = 0.5417%.
- First month: interest is $250,000 × 0.5417% = $1,354.17. The rest of the regular payment, $333.85, reduces the balance, and the extra $150 comes off too. The balance falls to $249,516.15 instead of $249,666.15.
- Next month's interest is $0.81 lower ($150 × 0.5417%), and that saving recurs every month after, on top of the savings from each later extra payment.
- With the formula: −ln(1 − 0.005417 × $250,000 ÷ $1,838.02) ÷ ln(1 + 0.005417) = 247.07, so 248 payments instead of 300.
The loan is paid off in 20 years 8 months, 4 years 4 months sooner. You pay $37,050 in extra principal and save $52,292 in interest: total interest falls from $256,405 to $204,113.
When you pay extra matters
Because each dollar stops accruing interest from the day it is applied, the same amount saves more the earlier it arrives. On the same loan, a one-time $10,000 with the first payment saves $36,747 and ends the loan 2 years 3 months early. With payment 121, ten years in, it saves $15,317; with payment 241, only $3,495, because by then there is little interest left to avoid.
The goal option runs the same loan in reverse: to be debt-free in 15 years instead of 25, the calculator finds an extra $489.75 a month.
Common mistakes
- Not telling the servicer it is principal. An overpayment without instructions may be applied to next month's payment or held as unapplied funds, which does nothing for your interest. Mark it as principal and confirm the drop on your next statement.
- Assuming you can skip a payment later. On most loans, paying ahead on principal does not excuse a future payment; the full payment is still due each month. Check your loan documents before assuming otherwise.
- Overlooking a prepayment penalty. Most home loans allow prepayment without a fee, but some charge one for paying off early or paying above a set amount in the first years. Your Loan Estimate and Closing Disclosure state whether the loan has a prepayment penalty.
- Treating extra principal as savings you can tap. Money in the house is not in the bank; getting it back means selling, refinancing or borrowing against the home. How much cash to keep within reach is a personal trade-off the calculator cannot weigh.
- Entering the original loan amount instead of the current balance. If you have been paying for years, start from the balance on your latest statement and the years actually left, or the savings will be overstated.
Limits of this estimate
- It assumes a fixed rate for the rest of the loan. If your rate can change, the ARM payment calculator covers the adjustment.
- It covers principal and interest only. Property tax, insurance and mortgage insurance in escrow are unaffected by extra payments, though reaching 80% of the original value sooner can let you ask to end PMI earlier.
- It assumes extra principal is credited on the same day as the regular payment. Servicers that post extra payments separately, or loans that charge interest daily, can produce slightly different figures.
- The goal figure is a steady monthly extra only. It ignores any yearly or one-time amounts you enter.
- It does not model taxes, other debts or what the same money might earn elsewhere.
Frequently asked questions
Is it better to pay extra every month or once a year?
For the same yearly total, money that reaches the balance sooner saves a little more. In the example on this page, $150 extra every month saves $52,292 in interest, while $1,800 once a year, with the twelfth payment, saves $49,997. The gap is small.
Will extra payments lower my monthly payment?
No. On a standard fixed-rate loan the required payment stays the same and the loan simply ends sooner. Some lenders offer a recast, which re-spreads the lower balance over the remaining term and reduces the required payment. The recast calculator shows that side of the trade.
How do I make sure the extra goes to principal?
Use the servicer's principal-only option, or include written instructions to apply the extra to principal. Then check the next statement: the balance should drop by the regular principal plus your extra. If it was applied to a future payment or held as unapplied funds, ask the servicer to correct it.
Can I get the money back if I need it later?
Not directly. Extra principal becomes home equity, and turning equity back into cash usually means selling, refinancing, or borrowing against the home, which has its own costs and approval. The HELOC calculator shows how a home equity line is repaid.
Does paying extra help me drop PMI sooner?
It can. On most conventional loans, federal law lets you ask to cancel borrower-paid PMI once your balance reaches 80% of the home's original value, and extra principal gets you there sooner. The automatic cutoff at 78% follows the original schedule. The PMI removal calculator finds both months, with or without extra payments.
Is a biweekly plan the same as paying extra?
Close to it. Half the monthly payment every two weeks adds up to 13 full payments a year, one more than paying monthly. Adding one-twelfth of a payment to each monthly payment gives almost the same result. The biweekly payment calculator compares the two.
Next steps: if you have a lump sum and would rather lower the payment than shorten the loan, the recast calculator shows the new payment. To see what paying every two weeks does, try the biweekly payment calculator. If you still pay PMI, the PMI removal calculator shows how extra payments move that date.