Extra Mortgage Payment Savings Calculator
See how much interest you save and how many years you cut by making extra monthly payments on your mortgage.
How Extra Mortgage Payments Work Every dollar you pay above your required monthly payment goes directly to reducing your principal balance. A lower principal means less interest accrues each month — which creates a compounding snowball effect. Even a modest extra $100–$200/month can cut years off your mortgage and save tens of thousands in interest.
Standard Monthly Payment Formula P = L × [r(1+r)^n] / [(1+r)^n − 1]
Where:
- P = monthly payment
- L = loan balance
- r = monthly interest rate (annual rate ÷ 12)
- n = total number of payments (years × 12)
Amortization With Extra Payments Each month, interest accrued = remaining balance × monthly rate. The regular payment covers that interest plus a small slice of principal. Your extra payment eliminates additional principal directly, compressing future interest.
Worked Example Loan: $300,000 | Rate: 6.5% | Term: 30 years | Extra payment: $200/month
Normal monthly payment: $1,896 Total interest (no extra): $382,560 Total interest (with extra): ~$280,000 Interest saved: ~$102,000+ Time saved: ~6 years
Why This Matters So Much In the early years of a mortgage, most of your payment is interest — not principal. On a $300k loan at 6.5%, the first payment is roughly $1,625 interest and only $271 principal. Extra payments attack principal when it matters most, cutting the most expensive early interest.
Refinancing vs Extra Payments Refinancing to a lower rate can save more — but has closing costs. Extra payments are free, flexible, and reversible (you can stop anytime). Both strategies can be combined for maximum effect.