Find out how much time and interest you save by paying extra toward your mortgage.
Every extra dollar you pay toward principal reduces the balance on which future interest accrues. This compounding benefit means even a small regular extra payment shortens your term and saves a multiple of the payment in interest over time. The calculator runs the full amortization schedule both ways and differences the results.
Scheduled payment
M = P × r(1+r)ⁿ / ((1+r)ⁿ − 1)
Interest saved
Interest saved = Total interest (no extra) − Total interest (with extra)
Results are estimates assuming a fixed interest rate and consistent extra payments. Actual savings depend on your lender's application timing and any prepayment restrictions.
Yes — once the month's interest is satisfied, any additional amount reduces the outstanding principal balance directly. Your lender applies the standard payment first (interest then principal) and any extra to principal only.
Extra payments save the most when made early in the loan when the balance is highest. Even a single extra payment in the first year can save thousands in interest. Consistent monthly extra payments produce the largest benefit.
Some mortgages, particularly older ones, include a prepayment penalty clause if you pay off more than a set amount early. Check your loan documents or ask your servicer before making large extra payments.
Refinancing typically lowers your rate and restarts your term, while extra payments keep your rate but shorten the term. Use the Refinance Calculator to compare both strategies side by side.