Extra Payment Mortgage Calculator

How extra payments cut your interest

Each month’s interest is your balance times the rate, divided by 12. Extra principal lowers the balance, so it lowers every interest charge after it. On the example loan, $200 extra a month pays it off 6 yr 6 mo sooner and saves $121,978 in interest.

A one-time payment works the same way. $1,000 extra in month 13 saves $6,538 in interest and takes 3 mo off the loan. Paid earlier, the same dollars avoid interest for more months. For more ways to pay down a loan, read our guide to paying off your mortgage faster.

How much extra to pay it off by a target date

To finish by a set date, work backward from it. The calculator finds the smallest extra monthly payment, to the cent, that pays the loan off in time. On the example loan, finishing in 20 years instead of 30 takes $373.26 extra each month and saves $182,684 in interest.

A shorter loan is another route. To weigh a new term against extra payments on your current one, use the Mortgage Comparison Calculator, and see the Refinance Break-Even Calculator to find out whether a new loan would pay back its own costs.

Every two weeks vs one extra payment a year

Paying half your monthly payment every two weeks makes 26 half-payments a year, which equals 13 monthly payments. On the example loan, that pays it off in 23 yr 9 mo and saves $118,270 in interest compared with paying monthly.

Some biweekly programs charge a setup fee or a fee on each payment, and some servicers hold half-payments until they have a full one. You can get a similar result on your own: add one-twelfth of your payment ($189.07) to each monthly payment. On the example loan, that pays it off in 23 yr 9 mo and saves $117,168.

Extra payments vs saving or investing

Every extra dollar you pay avoids interest at your mortgage rate, and that saving is certain. But money paid into the house is hard to get back unless you sell or borrow against it. Weigh emergency savings, higher-interest debt and how soon you might need the cash before you commit.

• Keep enough savings that a job loss or repair does not force you to borrow at a higher rate.
• Debt with a higher interest rate than your mortgage costs more each month to carry.
• Extra payments lower your balance, but your required monthly payment stays the same unless you refinance or recast.

Before you pay extra

Ask your servicer how to mark extra money as principal-only. Otherwise it may be applied toward your next scheduled payment instead of lowering your balance. Also check your loan documents for a prepayment penalty. Our guide on how to read a Loan Estimate shows where to look.