Extra Mortgage Payment Calculator
Enter your current loan details and an extra monthly payment to see exactly how much time and interest you save.
The Power of Extra Mortgage Payments
Every dollar of extra principal payment you make saves you the interest that dollar would have accrued for the remaining life of the loan. At a 6.8% mortgage rate, each extra dollar in principal saves you 6.8 cents per year in interest — compounding throughout the remaining loan term. An extra $200/month on a $300,000 loan at 6.8% saves over $60,000 in interest and cuts 5+ years off your mortgage.
This is why extra mortgage payments are often compared favorably to conservative investments. A 6.8% guaranteed, risk-free return on your extra payments is difficult to beat without taking on market risk.
Front-Loading Your Extra Payments
Extra payments made early in the loan save significantly more than the same payments made later. In the first year of a $300,000 mortgage, nearly 85% of each payment is interest. Every extra dollar applied to principal in year 1 eliminates 29 years of future interest accrual on that dollar.