Mortgage with Extra Payments Calculator
Calculate how extra payments toward your mortgage principal can save you money and help you pay off your loan faster. Compare standard payments vs. payments with extra principal.
Payment Comparison
Savings Analysis
Extra Payment Summary
Extra Payment Strategies
Monthly Extra Payments
Add a fixed amount to your regular monthly payment. Most effective for consistent savings.
Best for: Steady income
Year-End Lump Sums
Apply tax refunds, bonuses, or other windfalls as extra principal payments.
Best for: Variable income
Bi-Weekly Payments
Pay half your monthly payment every two weeks, resulting in one extra payment per year.
Best for: Automated payments
One-Time Payments
Make large principal payments when you have access to extra cash.
Best for: Windfalls
Round Up Payments
Round your payment up to the nearest $50 or $100 for easy extra payments.
Best for: Small changes
Recurring Extra Payments
Set up automatic extra payments on your due date for consistent acceleration.
Best for: Discipline
Understanding Extra Mortgage Payments
Extra payments on your mortgage are additional amounts you pay toward your loan principal. Unlike regular payments that are split between principal and interest, extra payments go directly to reducing your loan balance, which can save you thousands in interest and help you pay off your mortgage faster.
How Extra Payments Work
When you make an extra payment, it reduces your loan balance immediately. Since interest is calculated on your remaining balance, this reduction lowers the interest you'll pay on future payments. Over time, this creates a compounding effect that can significantly accelerate your payoff.
Benefits of Extra Payments
- Interest Savings: Reduce total interest paid over the life of the loan
- Faster Payoff: Become debt-free sooner
- Equity Building: Build home equity faster
- Lower Monthly Costs: Reduce housing expenses earlier in life
- Financial Freedom: Achieve financial goals faster
Timing Matters
Extra payments are most effective early in your loan term when interest makes up the largest portion of your payment. As your loan matures, the principal portion increases, making extra payments slightly less impactful but still beneficial.
Prepayment Penalties
Some loans include prepayment penalties that charge fees for paying off your loan early or making extra payments. Always check your loan documents to ensure extra payments are allowed without penalties.
Tax Implications
Extra principal payments may reduce your mortgage interest deduction if you itemize on your taxes. However, the interest savings typically outweigh the tax deduction loss. Consult a tax professional for your specific situation.
Tip: Start with small extra payments you can afford to maintain. Even $50-100 extra per month can save you tens of thousands in interest and help you pay off your mortgage years earlier. Consider automating these payments for consistency.