Extra Mortgage Payment Calculator
See how much faster you can pay off your mortgage and how much interest you’ll save.
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The Power of Extra Mortgage Payments
How Do Extra Payments Work?
When you make your regular monthly mortgage payment, a large portion goes to interest, especially in the early years. An extra payment, however, goes directly toward reducing your principal loan balance. By lowering your principal, you reduce the amount of interest that accrues each month, which has a powerful compounding effect. Our Extra Mortgage Payment Calculator is designed to show you this effect in dollars and cents.
Why Use an Extra Mortgage Payment Calculator?
This calculator provides a clear and powerful illustration of one of the best wealth-building strategies available to homeowners. Here’s what you can learn:
- Total Interest Saved: See the exact dollar amount you’ll save over the life of your loan. This is often tens of thousands, or even hundreds of thousands, of dollars.
- Time Saved: The calculator shows you how many years and months you can shave off your mortgage term, helping you become debt-free faster.
- Motivation: Seeing the tangible results can provide the motivation needed to stick to a plan of making extra payments.
Frequently Asked Questions
How do I make an extra mortgage payment?
Most lenders allow you to add an extra amount to your regular monthly payment. It’s crucial to specify that this extra amount should be applied “directly to principal.” You can usually do this through your lender’s online payment portal or by including a note with your check.
Is it better to make extra monthly payments or one large extra payment per year?
Making smaller, extra monthly payments is generally more effective. This is because you reduce the principal balance sooner, which means less interest accrues in the following months. Our Extra Mortgage Payment Calculator helps you model the impact of consistent monthly contributions.
Are there any prepayment penalties?
Most modern mortgages do not have prepayment penalties, but it’s always a good idea to check your loan documents or contact your lender to be sure before you start making large extra payments.