How are mortgage interest savings from extra payments calculated?
Scheduled payment: M = P × r(1 + r)ⁿ ÷ ((1 + r)ⁿ − 1). Each month, interest is balance × r; the scheduled principal and any extra payment reduce the balance before the next month.
Money & mortgage
Mortgage extra payment calculator
Compare a U.S. fixed-rate mortgage with monthly, annual, or one-time extra principal payments to estimate interest and time saved.
- U.S. fixed-rate principal-and-interest model
- Instant updates as inputs change
- Data is calculated in this browser only
Estimated interest saved$118,8087 yr 9 mo
New payoffDec 2048
- Scheduled monthly payment
- $1,896.20
- Time saved
- 7 yr 9 mo
- Interest reduction
- 31.1%
- Extra principal applied
- $58,200
Two payoff paths
Original plan$382,633
With extra payments$263,825
- Original payoff
- Sep 2056
- Principal + interest
- $563,825
Common questions
Will an extra payment lower next month’s payment?
This estimate keeps the scheduled payment unchanged and applies extras to principal, shortening the term. A lender-approved mortgage recast would produce a different result.
Can I combine a lump sum with monthly extras?
Yes. The lump sum is applied at the selected payment number, monthly extras start with payment one, and the advanced plan can add one extra payment each year.
Are taxes and insurance included?
No. This comparison covers principal and interest on a fixed-rate loan. Check property tax, insurance, PMI, escrow, fees, and prepayment terms separately.
Calculation notes
Understand the Mortgage extra payment calculator
The calculator first finds the scheduled payment with the standard fixed-rate amortization formula. Monthly, annual, and one-time extras are then applied to principal, and interest is recalculated each period until the balance reaches zero. Property tax, homeowners insurance, PMI, fees, and adjustable-rate changes are excluded.
What happens if I pay $250 extra on my mortgage every month?
A $320,000 balance at 6.5% with 30 years remaining has a scheduled principal-and-interest payment of about $2,023. Adding $250 every month pays the loan off about 7 years 9 months sooner and saves roughly $123,000 in interest.
Do extra principal payments shorten the mortgage term?
- Interest saved compares total scheduled interest with the extra-payment path.
- Time saved assumes the lender applies every extra amount directly to principal without lowering the scheduled payment.
Does this mortgage payoff calculator include taxes, PMI, or prepayment penalties?
- Confirm how your servicer applies extra payments and whether the loan has a prepayment penalty.
- Taxes, insurance, PMI, escrow changes, lender fees, refinancing, and adjustable rates are outside this model.
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