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Calculate Your Extra Payment Savings
Enter your loan details and extra payment amounts to see a side-by-side comparison.
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Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
How Extra Payments Save You Money
Every dollar you pay above your required mortgage payment goes straight to your principal balance. That means less money sitting there collecting interest next month, and the month after that, and every month until the loan is paid off. The savings compound over time because you're shrinking the base that interest is calculated on.
The biggest bang for your buck comes early in the loan. During the first few years of a 30-year mortgage, roughly 80% of each payment goes to interest. An extra $200 in year one displaces far more interest than $200 in year twenty, because that principal reduction ripples forward through decades of payments.
Real Example: $200/Month Extra
Loan: $300,000 at 6.5% for 30 years
Standard payment: $1,896/month
With $200/month extra: $2,096/month
Interest saved: $97,920
Time saved: 5 years, 3 months
New payoff: Year 25 instead of Year 30
That $200/month turns into almost $98,000 in savings. You're not earning that return in a savings account. And unlike stock market gains, the savings are guaranteed the moment you make the payment.
3 Extra Payment Strategies
1. Monthly Extra Payments
Pick a number you can handle every month and add it to your payment. Even $100 or $200 makes a real difference over 30 years. The consistency is what matters here. You won't miss $200 after a couple months, but your future self will notice six figures in interest savings.
Best for: People with steady income who want a set-it-and-forget-it approach.
2. Annual Lump Sum
Got a tax refund? Year-end bonus? Throw it at the mortgage. A $5,000 annual payment knocks years off your loan without changing your monthly budget at all. You keep your normal cash flow and still make serious progress on the balance.
Best for: People who get annual bonuses, tax refunds, or seasonal income.
3. One-Time Lump Sum
Inheritance, insurance payout, or sold some stock? A single large payment early in the loan has an outsized impact. $20,000 applied to principal in year two of a 30-year mortgage can save you over $40,000 in interest because that money would have been collecting interest for 28 more years.
Best for: Windfalls like inheritance, insurance payouts, or investment gains.
Should You Make Extra Payments?
Extra payments aren't always the best move. Your mortgage is probably the cheapest debt you'll ever carry, so the math depends on what else you could do with that money.
Good Reasons to Pay Extra
- You already have a 3-6 month emergency fund
- Your mortgage rate is above 5-6% (hard to beat that guaranteed)
- You want the mortgage gone before retirement
- Sleeping better matters more than optimizing returns
- You're close to 20% equity and can drop PMI
Maybe Hold Off If
- You don't have an emergency fund yet
- You're carrying credit card or high-interest debt
- Your mortgage rate is below 4% (invest the difference)
- You haven't maxed out your 401(k) or IRA
- You might need that cash within 2-3 years
Quick math:If your mortgage rate is 6.5%, every extra dollar you pay earns a guaranteed 6.5% return. Compare that to whatever else you'd do with the money. If you can reliably earn more than 6.5% after taxes elsewhere, invest instead. If not, pay down the mortgage.
Frequently Asked Questions
How do extra payments save money?
Extra payments go directly to reducing your principal balance. This lowers the amount accruing interest, saving you thousands over the loan term and potentially cutting years off your mortgage.
What is the best extra payment strategy?
The best strategy depends on your situation. Monthly extra payments provide consistent reduction. Annual lump sums (tax refund, bonus) are easier to manage. One-time lump sums early in the loan have the biggest impact.
Can I make extra payments on any mortgage?
Most mortgages allow extra payments without penalty after the first 3 years. Check your loan documents for prepayment penalties. FHA, VA, and most conventional loans allow unlimited extra payments.
Should I make extra payments or invest the money?
Compare your mortgage rate to potential investment returns. If your mortgage rate is 6.5% and you can earn 8%+ investing, investing may be better. If your rate is higher than expected returns, extra payments guarantee savings.
How much extra should I pay each month?
Even $100-200 monthly can save tens of thousands in interest. Use our calculator to see the impact. Ensure you have a 3-6 month emergency fund before making extra payments.
Explore More Calculators
Use our full mortgage calculator for a complete amortization analysis, or compare refinancing options.