Extra Mortgage Payment Calculator: Interest Saved
What would adding a bit extra each month save? This page compares your normal schedule with one that includes an extra monthly, yearly or one-time payment, and shows the interest saved and months cut.
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Formula
- Scheduled payment =
P x r / (1 - (1 + r)^-n)withr= annual rate / 12 (from the shared amortization engine). - Each month: interest = balance x r; principal paid = payment - interest + any extra; the last payment is capped at the balance.
- Months saved = original months - months until the balance reaches zero. Interest saved = original interest - new interest.
Worked example
300,000 at 6% for 30 years: payment 1,798.65, interest over the full term 347,514.57. With an extra 200 every month starting in month 1 the loan ends after 279 months (81 saved) and total interest is 256,341.13, so about 91,173 of interest is saved.
Other cases on the same loan: 2,400 once a year from month 1 gives 277 months (83 saved); a single 20,000 in month 1 gives 303 months (57 saved).
When to use it
Use this page to compare the cost of your schedule against a plan that adds money. If you only want the payoff date at a payment you already make, use the mortgage payoff calculator. Biweekly payments are one specific extra-payment strategy, with its own page, and the amortization calculator shows the full schedule.
Second example
Extra 500 a month from month 1 on 300,000 at 6% pays the loan off in 212 months (148 saved) and cuts interest by 160,294.97. Extra 100 a month saves 47 months and 53,346.41.
Common mistakes
- Not marking the money as principal-only when the lender requires it.
- Ignoring prepayment penalties.
- Overstating the saving by starting extras in a later month than you will really pay.
- Paying extra while holding higher-interest debt that deserves the money first.
Assumptions
- Fixed rate, payments at the end of each month, extra money applied entirely to principal.
- Taxes, insurance and prepayment fees are not included.
Frequently asked questions
How much does an extra monthly payment save?
On a 300,000 loan at 6% for 30 years, an extra 200 a month from month 1 pays the loan off in 279 months instead of 360 and cuts interest from 347,515 to 256,341, a saving of about 91,173.
Is one lump sum better than regular extra payments?
Earlier money saves more interest because it removes balance for longer. An extra 20,000 in month 1 on the same loan saves 57 months, while 2,400 a year (200 a month spread out) saves 83 months.
What does the start month mean?
Monthly extras begin in that month and continue. Yearly extras are paid in that month and every 12 months after. A one-time extra is paid only in that month.
Do extra payments always go to principal?
This calculator assumes yes. Some lenders apply extra money to the next payment unless you mark it as principal-only, and some loans charge prepayment fees, so check with your lender.
How much extra per month pays off a 30-year mortgage in 20 years?
On 300,000 at 6%, you need about 350 extra a month from the start. An extra 351 gives a payoff in 240 months and saves about 131,764 of interest. The regular payment is 1,798.65 and a plain 20-year loan would cost 2,149.29.
How do I calculate extra mortgage payments in Excel?
Use =NPER(rate/12, -(payment+extra), loan). For 300,000 at 6% with a 1,798.65 payment and 200 extra, =NPER(0.06/12,-1998.65,300000) is 278.4, so 279 months, matching this page.
Is it better to pay extra every month or once a year?
Earlier money saves more, but the gap is small. On 300,000 at 6%, 1,200 paid at the start of each year saves 48 months and 55,424.39 of interest, while the same 1,200 spread as 100 a month saves 47 months and 53,346.41. Paying the yearly amount in month 12 instead saves 45 months.