Extra Mortgage Payment Impact Calculator
See how making extra monthly mortgage payments reduces your loan term and total interest paid.
Visualize your payoff acceleration.
Making even small extra payments on your mortgage each month can save tens of thousands of dollars in interest and shave years off your loan. This happens because mortgages are front-loaded with interest: in early years, most of your payment goes toward interest rather than principal.
How mortgage amortization works: Each monthly payment is split between interest and principal:
Monthly interest = Remaining balance × Monthly interest rate
The rest of your payment reduces the principal. As the principal falls, the interest portion of each payment decreases, and more goes to principal. This is why extra payments early in the loan have the most impact: they reduce the principal that future interest is calculated on.
The extra payment formula: For a loan with balance B, monthly rate r, remaining term n months, and extra payment E per month:
The new effective payment = Standard payment + E New remaining term = −ln(1 − B × r / (Standard payment + E)) ÷ ln(1 + r)
Practical examples (on a $300,000 30-year mortgage at 7% interest):
| Extra per month | Pays off | Interest saved |
|---|---|---|
| Nothing | 30 years, $418,527 interest | n/a |
| $100 | 4 years 2 months earlier | $68,795 |
| $200 | 7 years 1 month earlier | $114,652 |
| $500 | 12 years 8 months earlier | $199,378 |
Those savings are larger than people expect, and the easiest way to convince yourself is to ignore interest entirely and just count the cash. Paying $1,995.91 for 360 months hands the bank $718,527. Paying $2,195.91 for 275 months hands it $603,875. You keep the difference, $114,652, and you stop paying seven years sooner.
Notice that the saving is not proportional to the extra payment. Doubling $100 to $200 does not double the saving from $68,795 to $137,590; it gets you $114,652. Each additional dollar buys slightly less, because the loan is already shortening.
Other strategies:
- Bi-weekly payments: Pay half your monthly payment every two weeks. You end up making 26 half-payments = 13 full payments/year instead of 12. This one extra payment per year can save 5–6 years on a 30-year mortgage.
- Annual lump sum: Apply bonuses, tax refunds, or windfalls directly to principal.
- Round up payments: If your payment is $1,847, pay $2,000. Simple and painless.
Important: Always specify that extra payments go to principal, not toward next month’s payment. Contact your lender to confirm how to designate extra payments.
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This calculator runs entirely in your browser, so the numbers you enter stay on your device. The math behind it is written by hand and tested against worked examples and standard references before the page goes live.
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