Extra Payment Calculator
See how extra monthly payments shorten your loan and save you thousands in interest.
| Year | Standard Balance | With Extra Payments | Difference |
|---|---|---|---|
| Year 5 | $283,041 | $270,535 | $12,506 |
| Year 10 | $257,382 | $225,953 | $31,429 |
| Year 15 | $221,900 | $164,305 | $57,595 |
| Year 20 | $172,835 | $79,056 | $93,778 |
| Year 25 | $104,986 | $0 | $104,986 |
How Extra Mortgage Payments Save You Money
Every extra dollar you pay goes directly toward your principal balance, which means less interest accrues each month. This creates a compounding effect: as your principal drops faster, each subsequent payment puts more toward principal and less toward interest. Even a modest extra payment of $100-200 per month can save tens of thousands in interest and shave years off a 30-year mortgage.
There are several strategies for making extra payments. Rounding up is the simplest: if your payment is $1,847, round to $1,900 or $2,000. Annual lump sums work well if you receive bonuses or tax refunds. Biweekly payments (paying half your monthly payment every two weeks) result in 26 half-payments per year, which equals 13 full payments instead of 12.
Before committing to extra payments, check that your mortgage has no prepayment penalty (most conventional loans do not). Also consider whether high-interest debt like credit cards should be paid off first. If your mortgage rate is low, investing the extra money may generate better returns. But for peace of mind and guaranteed savings, extra mortgage payments are hard to beat.