Calculate how much you can save by paying off your mortgage early with extra payments
200 extra
The standard fixed-rate mortgage payment formula calculates your monthly payment based on principal, interest rate, and term:
= Monthly payment
= Principal loan amount
= Monthly interest rate (annual rate ÷ 12)
= Total number of payments (years × 12)
Make extra payments regularly - Even small amounts add up
Apply windfalls - Tax refunds, bonuses, etc.
Bi-weekly payments - Make half payments every two weeks
Learn more about mortgage payoff strategies and homeownership from these authoritative sources:
Tip: Before making extra payments, check with your lender about prepayment penalties and confirm extra payments are applied to principal, not future installments.
Most homeowners don't realize that mortgage amortization is front-loaded with interest. In the early years, the vast majority of each payment goes toward interest — not principal. This mathematical structure means that extra payments made early in the loan's life have a dramatically larger impact than those made later.
Consider a $300,000 mortgage at 7% APR over 30 years. The monthly payment is $1,996. Here's how payment #1 breaks down:
Only 12.3% of payment #1 reduces your balance. By payment #300 (year 25), that ratio flips to over 80% going toward principal.
An extra $246 payment in month 1 eliminates an entire future payment — saving $1,996 that would have been due 30 years later. The savings ratio:
Every dollar of extra principal in year 1 saves about $8.10 over the life of the loan. By year 20, the ratio drops below 2×. This is why financial advisors recommend front-loading overpayments.
Real impact: Adding just $200/month to a $300K, 30-year mortgage at 7% saves approximately $124,000 in total interest and pays off the loan nearly 9 years early. But the same $200/month starting in year 15 saves only $29,000 and cuts just 3 years off the remaining term.
Financial Disclaimer
This calculator is provided for educational and illustrative purposes only. Results are estimates based on the inputs provided and assume a fixed interest rate with consistent extra payments. Actual mortgage terms, interest calculations, and payoff timelines may vary based on your lender, loan type, and payment application rules. This tool does not constitute financial advice. Consult a licensed financial advisor or mortgage professional before making decisions about your home loan.