Extra Payment Savings Calculator
The Extra Payment Savings Calculator compares your current mortgage payoff with the outcome of adding a fixed extra monthly payment. It shows the months shaved off your term and the total interest saved.
What this means
Extra payments reduce your principal directly, which shrinks the balance that future interest is charged on. Even modest extra amounts compound into significant savings over a long mortgage term.
How we calculate it
Formula
Interest saved = total interest without extra payments − total interest with extra payments. Months saved = payoff months without − payoff months with.Worked example
A $200,000 balance at 6.5% with a $2,000 payment and an extra $200 a month:
- 1Original payoff ≈ 142 months, total interest ≈ $83,600
- 2With extra $200/mo payoff ≈ 121 months
- 3You save ≈ 21 months and ≈ $13,400 in interest
Important assumptions
- The extra payment is applied to principal each month at the same time as your regular payment.
- Rates are fixed and no prepayment penalties apply.
- You never miss a payment and the extra amount stays constant.
Frequently asked questions
When should I make extra payments?
After building an emergency fund and paying off high-interest debt. Extra mortgage payments lock your money into the home, so only do it if you won't need the cash soon.
Should I invest instead of paying extra?
If your mortgage rate is below your expected investment return after taxes, investing can beat prepaying. This calculator shows the guaranteed interest savings from prepaying for you to compare.
How do I make sure extra payments go to principal?
Write 'apply to principal' on your payment and confirm with your servicer that the funds are applied as principal, not as an early next payment.