Use the result for a focused comparison.
- Estimate the effect of a recurring extra payment before changing a household budget.
- Compare months saved with the interest that remains under each scenario.
- Check whether the current payment is large enough to reduce principal.
Formula and calculation method.
Each month: interest = balance × annual rate ÷ 12; principal paid = regular payment + extra payment − interestThe calculator advances one month at a time. Interest is charged on the opening balance, then the entered regular and extra amounts reduce the balance. It compares that result with the same loan using no extra payment.
Follow the numbers in context.
$240,000 balance at 5.5%, $1,600 current payment, plus $200 monthly
Working: Monthly interest is charged to the declining balance and both payment amounts are applied until the balance reaches zero.
Result: The extra payment shortens the modeled payoff and reduces remaining interest compared with paying $1,600 alone.
Interpretation: Savings depend on the lender applying the extra amount promptly to principal without a prepayment charge.
Read the estimate with its assumptions.
A shorter modeled payoff does not automatically mean extra mortgage payments are the best use of cash. Compare liquidity needs, emergency reserves, other debt rates, taxes, and alternative uses of the money.
The result models one consistent extra amount; occasional or changing payments will produce a different schedule.
Before sending more than the scheduled amount, verify how the servicer labels and applies it. An amount held for a future installment does not reduce principal at the same time as an immediate principal-only payment. Retain the confirmation and compare the next statement’s principal balance with the expected direction of change.
What the model includes—and leaves out.
- Interest accrues monthly on the opening balance.
- The regular and extra payments are made every month.
- Extra amounts are applied directly to principal.
- The interest rate remains fixed.
The estimate excludes escrow, late charges, prepayment penalties, daily-interest timing, rate changes, payment recasting, and lender-specific allocation rules. Ask the servicer how to designate extra principal and request an official payoff statement before closing a loan. It models a generic fixed-rate monthly mortgage as of September 2026, not the prepayment rules, tax consequences, or consumer protections of a particular country.
Unusual inputs need extra care.
The calculator stops because the balance would not amortize.
A zero current balance is already paid off.
Scenarios requiring more than 100 years are outside the supported range.
Questions about this calculation.
Does an extra mortgage payment always reduce interest?
It generally does when the lender applies it immediately to principal and no offsetting fee applies. The exact effect depends on timing and servicing rules.
Is this the same as an official payoff quote?
No. An official quote can include daily interest, fees, and a date through which the amount is valid.
Should I pay extra monthly or as a lump sum?
Earlier principal reduction generally avoids more future interest, but the right choice depends on cash availability and lender rules. This page models a recurring monthly amount.