Extra Mortgage Payment Calculator
Example: Loan balance: 320000 $ · Interest rate (APR): 6.5 % · Loan term remaining: 30 years · Extra monthly payment: 300 $
| Months to pay off | 254 |
| Interest saved | $138,446 |
| Months saved | 106 |
Worked example
Take a $320,000 balance at 6.5% over 30 years. The standard payment is about $2,023, and over the full term you would pay roughly $408,000 in interest. Add $300 a month and the loan clears in about 24 years instead of 30 — roughly 73 fewer months — and total interest drops by more than $90,000. The extra $300 does far more work than the same money sitting in a low-yield account.
Frequently asked questions
Where does an extra payment go?
Applied correctly, extra money goes entirely to principal, reducing the balance immediately. Tell your servicer to apply it to principal, not to prepay next month, so it actually shortens the loan.
Is paying down my mortgage better than investing?
The answer turns on your rate versus expected investment returns and your risk tolerance. A guaranteed return equal to your mortgage rate is attractive when rates are high, but many people split the difference. This tool shows the guaranteed side of that trade.
Will extra payments lower my monthly bill?
No — your required monthly payment stays the same; you just finish sooner. If you want a lower required payment, you would need to recast or refinance. The benefit here is time and interest saved.
Are there prepayment penalties?
Most modern conventional mortgages have no prepayment penalty, but some loans do. Check your note before making large extra payments so you are not charged a fee for paying early.