Mortgage Extra Payment Calculator: Payoff & Interest Savings

What changes when you pay extra principal?

An additional principal payment reduces the balance used to calculate future interest. This model keeps the regular principal-and-interest payment unchanged and adds your extra amount every month, beginning with the next payment.

Monthly interest = opening balance × annual rate ÷ 1200.
Principal repaid = payment − monthly interest.
New balance = opening balance − principal repaid.

Compare two repayment paths

The baseline is recalculated from the current balance and remaining term you enter. The accelerated path adds the extra principal. Their difference gives estimated interest savings and months saved. With an extra payment of zero, both paths are identical.

Why is the final payment smaller?

The last payment is capped at the balance plus that month’s interest. A large extra payment cannot make the loan balance negative. The CSV shows this final installment.

Before using a real repayment plan

Confirm how your servicer applies additional payments and whether fees or prepayment penalties apply. This model assumes each extra amount reduces principal and does not recast your required payment. Escrow, PMI, penalties, missed payments, and one-time lump sums are excluded.

Reference and methodology

Background reading: Federal Reserve guide: mortgage terms and prepayment considerations. Calculations use the formulas and assumptions explained on this page.

About this calculator

Prepared by the UtilitiesWeb team at The Alpha 1 Company. Estimates are educational illustrations, not personalised financial advice, lending decisions, or guaranteed outcomes. Verify important decisions against provider documents and qualified advice where needed.

Methodology updated: 1 November 2026. Example rates and costs are assumptions, not live market quotes. Amounts are calculated at full precision and rounded for display.