See how much interest you save and how much sooner your mortgage is paid off when you add extra money to principal.
Results update as you type — there is no submit button, no email wall, and no account. The interest rate field is pre-filled with the latest national average 30-year fixed rate published on our mortgage rates page, with the survey's publication date shown beneath it, and every field is editable. Inputs used: Current loan balance, Interest rate, Years left on the loan, Extra principal each month, Extra principal once a year, ZIP code (optional).
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Every scheduled payment is split between interest, which is the balance multiplied by one twelfth of the annual rate, and principal, which is whatever is left. Any extra dollars you send go entirely to principal. Because next month's interest is charged on a smaller balance, more of the following scheduled payment also goes to principal, and the effect compounds until the balance reaches zero ahead of schedule.
Two amortization schedules are run side by side from the same balance, rate, and remaining term. The first assumes only the scheduled payment. The second adds your monthly extra amount and any annual lump sum. The results show the new payoff date, the number of months saved, and the difference in total interest between the two schedules.
Money applied earlier saves more interest, so a smaller amount added every month usually beats the same total sent once a year. The calculator supports both at the same time so you can compare a modest monthly amount against an annual bonus or tax refund.
Confirm with your servicer that additional funds are applied to principal rather than held as a prepayment of the next installment, and ask whether the loan has any prepayment penalty. Extra principal is also not liquid — once it is in the house you cannot spend it — so higher-rate consumer debt and an emergency fund usually come first.
The first twelve months are shown by default and the full schedule expands on request. Each row splits the payment between interest and principal and shows the balance that remains.
Monthly usually wins slightly, because each dollar starts reducing interest sooner. The difference over the life of a loan is real but modest, so the schedule you will actually stick to matters more.
No. On a normal fixed-rate loan the required payment stays the same and the loan simply ends earlier. Some servicers offer a recast for a fee, which recalculates the payment on the lower balance while keeping the original end date.
Most standard conforming, FHA, and VA loans have none, but some non-QM and investor loans do. Check your note before committing to a payoff plan.
It comes down to your mortgage rate, your expected after-tax return, and how much certainty you want. Paying principal is a guaranteed return equal to your rate; investing is not guaranteed but may return more.
Use your servicer's principal-only option or write the instruction on the payment, then check the next statement to confirm the balance dropped by the full extra amount.
These calculators are free educational tools. Results are estimates based on the numbers you enter and are not a loan offer, rate lock, or pre-approval. Taxes, insurance, HOA dues, and mortgage insurance vary by property and lender. Talk to a licensed loan officer for figures specific to your situation.