Extra Payment Mortgage Calculator

Three Ways to Pay Extra

You can accelerate your payoff in three distinct ways, and this calculator handles all of them at once. A recurring monthly extra payment is the simplest — you add a fixed amount to every payment and your servicer applies it to principal. A yearly lump sum works well if you receive an annual bonus or tax refund and want to throw it at the mortgage once a year. A one-time payment covers scenarios like an inheritance or the proceeds from selling another asset.

You can combine all three in the calculator. The order of impact is straightforward: recurring monthly extras compound fastest because they reduce the balance twelve times a year, each time lowering next month's interest charge. A yearly or one-time payment still helps, but the benefit depends on when during the loan term you make it. Earlier is always better because the remaining balance — and therefore the interest saved — is larger.

When Extra Payments Help Most

The interest savings from extra payments are largest in the first half of the loan. This is because amortization front-loads interest: early in the schedule, most of your regular payment goes to the lender, not to your balance. An extra $200 in year two eliminates far more future interest than the same $200 in year twenty-five, when the balance is already small.

Before sending extra payments, check two things with your servicer. First, confirm there is no prepayment penalty on your loan — most conventional mortgages do not have one, but some older or non-conventional loans might. Second, make sure extra payments are applied to principal and not held for the next scheduled payment. Many homeowners on personal-finance forums report that servicers sometimes misapply extra funds unless you specify principal-only in writing or through your online portal.

These projections assume your extra payments are applied directly to principal each month. Confirm with your servicer that no prepayment penalty applies and that funds are allocated correctly.