Extra Mortgage Payment Savings Calculator
Add an extra amount to each mortgage payment and see how many years and how much interest you save by paying down principal faster.
How it works
Standard payment = P·r ÷ (1 − (1+r)^−n) · Amortize the balance at payment + extra each month · Interest saved = baseline interest − interest with extra
Every dollar added to a mortgage payment skips the interest queue and goes straight to principal, so the balance — and all the future interest it would have generated — shrinks immediately. The effect compounds: early extra payments save far more than the same dollars added near the end. On a 30-year loan even a modest extra amount can cut years off the term.
Worked example
On a $300,000 balance at 6.5% over 30 years the payment is about $1,896 and total interest is roughly $382,600. Add $200 a month and the loan clears in about 25 years instead of 30, cutting interest by roughly $70,000.
Frequently asked questions
Where does the extra payment go?
It should be applied entirely to principal. Confirm your servicer records extra amounts as "principal-only" rather than pre-paying the next installment, or the interest saving will not materialize.
Is it better to pay extra monthly or one lump sum a year?
Monthly extra payments save slightly more because principal drops sooner and compounds over more months, but both approaches help. The key variable is how early in the loan you start — earlier is dramatically more powerful.
Should I pay down the mortgage or invest instead?
That depends on your rate versus expected after-tax investment returns and your appetite for risk. Paying extra on a 6.5% mortgage is a guaranteed 6.5% return; compare that against what you could reliably earn elsewhere.
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Educational estimate only — not financial, tax or lending advice. Confirm exact figures with your lender.