Accelerate your path to being debt-free with our mortgage calculator extra principal payment tool. Visualize how adding even a small amount to your monthly mortgage bill can drastically reduce your loan term and save you thousands in total interest costs.
Extra Principal Payment Calculator
mortgage calculator extra principal payment Formula
This calculator uses a comparative amortization formula. It runs two schedules: one standard, and one where the principal balance is reduced by the extra payment amount every month before interest is calculated for the next period.
Savings = Total Interest (Standard) – Total Interest (Accelerated)
Variables
- Current Balance: The starting point of the loan calculation.
- Principal Portion: The part of your required monthly payment that reduces debt.
- Extra Principal: The additional amount applied 100% to reducing the debt.
Related Calculators
- Bi-Weekly Payment Calculator
- Lump Sum Payment Calculator
- Amortization with Extra Payments
- Refinance Breakeven Calculator
What is a Mortgage Calculator Extra Principal Payment?
A mortgage calculator extra principal payment tool is designed to show homeowners the “snowball effect” of prepaying their mortgage. Since interest is calculated on the outstanding balance, every dollar of extra principal you pay today reduces the interest charged in every future month.
This tool helps you answer questions like: “If I pay an extra $100 a month, how many years early will I be mortgage-free?”
How to Calculate Extra Principal Payment (Example)
- Baseline: You owe $200,000 at 6% with 25 years left. Payment is ~$1,288.
- Add Extra: You decide to pay $200 extra per month ($1,488 total).
- Result: The calculator shows you will pay off the loan 6 years early and save over $45,000 in interest.
Frequently Asked Questions (FAQ)
No. Your required monthly payment remains fixed. The extra payment simply shortens the number of months you have to pay. To lower the payment amount, you would need to “recast” the loan.
Most modern loans (Conventional, FHA, VA) do not carry prepayment penalties. However, it is always best to check with your loan servicer to confirm.
The earlier in the loan term, the better. Because mortgages are front-loaded with interest, an extra payment in year 1 saves much more money than an extra payment in year 25.
When making the payment online or via check, ensure you designate the extra amount specifically for “Principal Only” so the lender doesn’t just apply it to next month’s interest.