What extra payments actually do
On an amortizing mortgage, your required payment is calculated to clear the loan exactly at the end of its term — no sooner, and with a large amount of interest collected along the way. An extra payment breaks that schedule in your favour. Extra money is applied to the principal, the balance itself, so the loan is smaller from that month onward. Next month's interest is charged on the smaller balance, which leaves more of the regular payment free to reduce principal again, which makes the month after cheaper still. That self-reinforcing loop is why a modest extra amount, paid faithfully, removes a startling number of months from the end of a long loan: the savings are concentrated at the tail, where whole payments — each carrying its own interest — simply never happen. This calculator runs your loan twice, month by month, with and without the extra amount, so the comparison is exact rather than estimated. For the full payment, tax and insurance picture, see the Mortgage Calculator; for a complete schedule without extra payments, the Amortization Calculator.
The payoff formula and the loop behind it
Each month: interest = balance × r · principal paid = payment + extra − interest
Where B is today's balance, r is the monthly rate (yearly rate ÷ 12 ÷ 100), and N is the number of payments left in the remaining term. The required payment comes from the standard amortization formula; after that there is no shortcut — the calculator steps through the loan month by month, once with no extra payment for the baseline and once with your extra amount added to principal, counting months and interest until each run reaches zero.
Why the interest saving looks so large
Interest on a mortgage is front-loaded in effect even though the rate never changes: in the early years the balance is at its largest, so most of each payment is interest and very little is principal. An extra payment made now therefore does double duty — it removes principal that would otherwise have sat there generating interest for decades. On the default numbers — a $280,000 balance at 6.5% with 25 years left — the required payment is about $1,890.58 and the baseline interest over the remaining term is roughly $287,174. Adding $200 a month cuts about five years from the loan and saves roughly $66,894 of interest. Put differently, each extra dollar in the early years saves several dollars of interest by the end, while the same dollar paid near the end saves only pennies — timing is the whole game.
Worked example
Take the defaults exactly: balance $280,000, rate 6.5%, 25 years left, extra payment $200 a month. Baseline first: 300 monthly payments of about $1,890.58, total interest about $287,174.02. Now add the extra $200. The balance falls faster every month, the interest portion of each payment shrinks sooner, and the loan ends after 240 months — 20 years — having charged about $220,280.08 of interest. The extra payments themselves total $48,000 over those 20 years, but they are not a cost: they are principal you owed anyway, paid earlier. The true gain is the difference between the two interest bills, about $66,893.94, plus five years with no mortgage payment at all. Your own figures, updated live, are in the comparison table above.
Before you pay extra: the honest checks
Extra mortgage payments are irreversible in a practical sense — the money becomes home equity, which is far less accessible than cash in a savings account. So the usual order of operations matters: keep an emergency fund intact, capture any employer retirement match, and clear higher-rate debts first, because a credit card at a much higher rate is a more expensive loan than your mortgage. Check your loan documents for prepayment penalties — uncommon on modern US mortgages, but worth confirming — and tell your servicer to apply extra amounts to principal, since some servicers otherwise hold them against future payments. Finally, weigh the guaranteed return of interest saved against what the same money might earn invested; the mortgage saving is certain, the investment return is not, and that certainty has genuine value.
Worked example
A $280,000 balance at 6.5% with 25 years left needs payments of about $1,890.58 and costs about $287,174.02 in interest. Adding $200 a month clears it in 20 years instead of 25 and saves about $66,893.94 of interest.
How to use this calculator
- Enter your current mortgage balance — the amount still owed today, from your latest statement.
- Enter the loan's yearly interest rate and the years remaining on its original schedule.
- Enter the extra amount you could pay every month on top of the required payment.
- Compare the two payoff times and the two interest totals in the table — the footer is your saving in dollars and months.
- Try halving and doubling the extra amount: the first dollars of extra payment are the most powerful, and the benefit grows more slowly after that.
Other ways to pay a mortgage off early
A fixed monthly extra is the easiest strategy to automate, but it is not the only shape extra principal can take. One extra payment a year — a thirteenth payment, often made from a bonus or tax refund — lands as a single lump against principal and, spread across the year, is roughly equivalent to adding a twelfth of it each month. Biweekly half-payments work the same way by accident of the calendar: twenty-six half-payments add up to thirteen full ones a year. Windfalls work too, and a single large lump early in the remaining term can be worth more than years of small extras later, because it stops interest on that whole lump for the entire remaining loan. Whatever the shape, the principle on this page is identical: principal paid early is interest never charged.
Payoff time is stated as a duration, not a date
This calculator deliberately reports the payoff as a length of time — years and months — rather than naming a calendar month and year. A date would depend on when your next payment falls, whether your servicer credits extras immediately, and how the final partial payment is handled, none of which can be known from the balance, rate and term alone. The duration is the part the arithmetic can state exactly, and it is the part that matters for planning: it tells you how many payments disappear, how long your budget carries the loan, and how much interest the shorter life of the loan avoids.