Mortgage Extra Payment Calculator

Making extra monthly mortgage payments is one of the most reliable strategies available to homeowners who want to build equity faster and pay less overall. Because mortgage interest is calculated on the outstanding principal balance each month, any extra payment that reduces that balance also reduces every future interest charge for the remaining life of the loan — the savings compound over time. Even a modest overpayment of $100 to $200 per month can save tens of thousands of dollars over the remaining term of a large loan. Homeowners who receive an annual bonus, a tax refund, or a salary raise often direct a portion toward their mortgage for this reason. The key constraint to check before committing is whether your loan has a prepayment penalty clause, which some older or non-conventional mortgages include. This calculator models the exact month-by-month impact of extra payments, showing the precise interest saved, the number of months and years cut from the loan term, and the new payoff timeline so you can make an informed decision about how aggressively to prepay.

The calculator first computes the standard monthly payment using the amortisation formula: M = P × [r(1+r)^n] ÷ [(1+r)^n − 1], where P is the remaining balance, r is the monthly interest rate, and n is the number of months remaining. It then runs two separate month-by-month simulations. In the baseline scenario each month's payment is M, and interest accrues on the outstanding balance at rate r. In the accelerated scenario the monthly payment is M plus the extra amount. Because the extra payment reduces principal faster, less interest accrues in subsequent months. The total interest paid in each scenario is summed, and the difference is the interest saved. The difference in the number of months to reach a zero balance is the time saved.