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Extra Payment Calculator
What happens if you pay a little extra each month? This extra payment calculator shows the interest saved, the months cut off the loan, and the new payoff date — extra money goes straight to principal, so it pays off twice over.
How to use this calculator
- Enter the loan amount, the rate and the term.
- Enter the extra amount you can pay each month.
- The calculator shows the interest saved, the months saved and the new payoff time.
- Try a smaller extra amount to see how little it takes to make a difference.
Formula and method
Each month, interest is charged on the balance that is left. An extra payment cuts the balance by that much more, so next month's interest is smaller, and more of the normal payment goes to principal. The effect builds on itself month after month. The calculator runs the full schedule twice — once with the normal payment, once with the extra — and compares the two.
Worked example
$320,000 loan, 6.5% example rate, 30 years: the normal payment is $2,022.62 a month, total interest is $408,142.36, and the loan takes 360 months. Paying $200 extra a month ($2,222.62 in total) pays the loan off in 281 months — 23 years 5 months — with total interest of $302,713.69. That saves $105,428.67 of interest and 79 months, which is 6 years 7 months.
Even $100 extra a month pays the same loan off in 314 months and saves $61,698.47 of interest.
Frequently asked questions
How much extra should I pay on my mortgage?
Whatever you can pay every month without fail. On the $320,000 example, $100 extra saves $61,698.47 and $200 extra saves $105,428.67. The habit matters more than the size — a small amount paid every month beats a large amount paid once.
Is it better to pay extra monthly or once a year?
Monthly is slightly better, because the balance falls sooner and each month's interest is a little smaller. But the difference is small — the main thing is to pay extra at all. A lump sum once a year works too.
Does extra payment go to principal?
It should, but check with your lender. Most lenders put extra money toward principal, which is what cuts interest. Some apply it to the next payment instead, which does not help as much — ask before you pay.
How much interest do I save paying $200 extra a month?
On a $320,000 loan at a 6.5% example rate over 30 years, $200 extra a month saves $105,428.67 of interest and cuts 79 months off the loan. Put your own loan in above to see your number.
Should I pay extra on my mortgage or invest the money?
That is a personal choice, and this calculator cannot make it for you. Paying extra gives a sure saving equal to your mortgage rate. Investing may earn more or less, and it carries risk. Many people do a bit of both.
Sources and method. Standard amortization formula: monthly rate r = annual rate / 12, n = years × 12, payment M = P × r × (1+r)n / ((1+r)n − 1). PMI usually ends when the loan balance reaches 80% of the home value (Consumer Financial Protection Bureau guidance). Affordability uses the 28/36 rule of thumb used by many lenders. Rates in examples are examples only, not live market rates. Results are estimates, not financial advice.
Estimate, not financial advice. This calculator uses the standard amortization formula and the numbers you type in. It is not a loan offer and not financial advice. A lender will check your credit, income and debts and quote its own rate and fees before you borrow.