Mortgage Extra Payment Calculator

Add a little each month and watch the term shrink.

How to use this calculator

Enter your balance, rate, term and extra monthly payment, then press Calculate. The regular payment, base term, new term and interest saved are shown.

Worked example

On a $220,000 loan at 6.5% for 30 years, the payment is about $1,390 a month. Adding $200 extra each month pays the loan off in roughly 21 years instead of 30 and saves close to $93,000 in interest - a return equal to your 6.5% rate, guaranteed and tax-free.

What the result means

The tool shows your shortened term and total interest saved. Every extra dollar goes straight to principal, so it stops future interest from accruing on itself for the rest of the loan.

When extra payments win

• Rates above ~5% make prepayment a strong "investment" because the saving is risk-free.
• Extra monthly payments beat annual lump sums on timing - money applied earlier saves more.
• Low-rate mortgages (3-4%) may lose to investing the difference in a diversified portfolio over the long run.

Frequently asked questions

Is prepaying always a good idea?

Not if it empties your emergency fund or skips retirement contributions. Fund those first, then prepay with what remains.

What about the tax deduction?

Paying less interest means a smaller deduction, which slightly reduces the benefit - but only at your marginal tax rate, so the net saving is still large at current rates.

Confirm with your lender that extra payments are applied to principal, not held as an early payment of next month. Most lenders apply them correctly, but a few require a written instruction - one quick phone call ensures the calculator's savings actually materialize.