How to use this calculator
- Enter or choose mortgage amount.
- Enter or choose interest rate (per year).
- Enter or choose term.
- Enter or choose extra payment every month.
- Enter or choose one-off extra payment.
- The interest saved updates as you type. Use Copy result or Share to keep it.
Method
Payment A = L × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1). Each month: interest = balance × r; balance = balance + interest − A − extra.
- L
- mortgage amount
- r
- annual rate ÷ 12 ÷ 100
- n
- term in months
- extra
- extra principal paid that month
Worked example
- Regular payment on $300,000 at 6.5% over 360 months = $1,896.20; interest over the full term = $382,633.47.
- Paying $200 extra each month, the balance reaches zero after 277 payments.
- Interest falls to $279,184.67, a saving of $103,448.79, and the loan ends 83 months (almost 7 years) early.
An extra $200 a month on a $300,000, 6.5% mortgage saves about $103,000 of interest and clears it nearly 7 years early.
What the result means
Extra payments made early in the loan save the most, because they remove interest for the longest time. Check that your lender applies extra payments to principal and does not charge prepayment penalties.
Assumptions and limits
- Fixed rate; the regular payment stays the same and extra payments shorten the term.
- Extra payments are applied to principal in the month they are made.
- Prepayment limits or penalties, taxes and insurance are not modelled.
Questions
Is it better to pay extra or invest?
Paying extra earns a guaranteed return equal to your mortgage rate. Investing may earn more or less; compare after tax and risk.
How is this different from the loan amortization calculator?
This page models extra monthly and one-off payments and summarises the schedule by year; the loan amortization calculator shows a plain month-by-month schedule.
Please note: This calculator gives estimates for planning. It is not financial advice, and lenders’ actual terms, fees and rounding may differ.