Extra Mortgage Payment Impact Calculator

Extra mortgage payment impact calculator for payoff time and interest saved

Making extra payments on a mortgage can reduce your interest bill and shorten your payoff timeline, but the real impact depends on your balance, interest rate, remaining term, and how consistently you add extra money. This calculator estimates what happens if you pay extra each month or if you make a one-time lump sum payment right now. It is designed for normal homeowners who want a fast answer and also for more serious users who want a more accurate estimate when they know their current monthly payment.

Start by entering your current loan balance, your annual interest rate, and how many years are left on your loan. If you know your current monthly payment, enter it. If you do not, leave it blank and the calculator will estimate a payment that would pay off your loan over the remaining term at the interest rate you entered. Then choose an extra payment type: a monthly extra amount or a lump sum paid immediately. The result compares your baseline payoff (no extra) to your payoff with extra payments.

The main outputs are (1) your estimated new payoff time, (2) the interest you could save, and (3) the time you could save. The calculator also shows an estimated payoff date, which helps you translate “months saved” into a real-world planning date. Treat the payoff date as an estimate, because real mortgages can include fees, changing rates, insurance, escrow, and rules about how extra payments are applied. Still, for most standard amortizing home loans, the direction and the size of the benefit are reliable: paying extra earlier usually saves more interest than paying the same amount later.

Assumptions and how to use this calculator

• This assumes a standard amortizing mortgage where interest is calculated monthly on the outstanding balance.
• If you leave “monthly payment” blank, the calculator estimates a payment that pays off the loan over the remaining term using the rate provided.
• Extra monthly payments are treated as additional principal payments every month, starting immediately.
• A lump sum is applied immediately to reduce principal before the next interest period, which typically produces a bigger benefit than spreading the same amount over time.
• This does not include fees, penalties, escrow, insurance, taxes, or interest rate changes. If your loan has these, use the outputs as directional planning numbers.

Common questions

Do extra payments reduce the monthly payment or shorten the term?

Most mortgages shorten the term by default when you pay extra and keep the same scheduled payment. This calculator models that common case: the loan pays off earlier. Some lenders let you “recast” the loan, which lowers the payment instead. If you plan to recast, the interest saved can still be meaningful, but the monthly payment behavior is different.

What if I do not know my monthly payment?

Leave it blank. The calculator will estimate a monthly payment from your balance, interest rate, and remaining term. If you want higher accuracy, use your latest statement payment amount because it reflects how your lender actually calculates your schedule.

Why does a lump sum often save more interest than the same money spread out?

Interest is driven by the balance outstanding over time. A lump sum reduces the balance immediately, so you avoid interest on that portion for every future month. Spreading the same amount out over months reduces the balance more slowly, so more interest accrues along the way.

Can extra payments ever be a bad idea?

Yes. If your mortgage rate is low and you have higher priority uses for cash (high-interest debt, emergency fund gaps, or essential savings goals), paying extra might not be optimal. Also check whether your lender has any prepayment penalties and whether extra payments are applied to principal correctly.

What should I do if my result shows “no payoff” or a very long payoff time?

This usually happens when the monthly payment entered is too small to cover the monthly interest, especially at high rates. Increase the payment, correct the interest rate, or confirm your balance and term. A loan cannot amortize if the payment is not large enough to reduce principal.