Extra Payment Calculator

Even small extra payments compound into major savings. On a $300,000, 30-year mortgage at 7%: $50/month extra saves about $38,000 and cuts 2+ years off; $100/month saves about $69,000 and cuts 4+ years; $200/month saves about $117,000 and cuts 7+ years. Every extra dollar goes straight to principal, permanently lowering the balance your interest is calculated on.

Monthly extra payments are slightly more effective because they reduce the principal balance sooner, meaning less interest accrues each month. However, yearly lump sums (like tax refunds or bonuses) still provide significant savings. The best strategy is the one you can consistently maintain. Start with what you can afford and increase over time.

This depends on your mortgage interest rate vs expected investment returns. If your mortgage rate is 6% and you expect 8% returns from investing, investing may be better mathematically. However, paying off your mortgage provides a guaranteed return equal to your interest rate, plus the psychological benefit of being debt-free. Many people do both.

Yes, significantly. Every extra payment reduces your principal balance, which means less interest accrues on future payments. Since interest is calculated on the remaining balance, even small extra payments create a compounding effect that saves thousands in interest over the life of the loan.

The time saved depends on the extra amount and your interest rate. On a 30-year mortgage at 7%, $200/month extra pays it off about 7 years early. A bi-weekly payment strategy (one extra payment per year) cuts about 5 years. Use our calculator to see the exact timeline for your specific situation.

Most conventional mortgages in the US do not have prepayment penalties. However, some loans — particularly those with below-market rates or certain specialty products — may include prepayment penalties for the first 2-5 years. Check your loan documents or ask your lender. FHA, VA, and USDA loans do not have prepayment penalties.