How the calculator works
Every mortgage payment first covers the interest that built up on your balance that month. Whatever is left reduces the principal. As the CFPB explains, early in a loan most of each payment is interest, and the mix shifts toward principal as the balance falls. Any extra money you send goes straight to principal, so next month's interest is smaller and more of every later payment pays down the loan.
The calculator starts from your current balance, rate and years left, works out your regular principal and interest payment, and then replays the loan one month at a time twice: once with only the regular payment and once with your extras. The difference in the number of months is the time you save; the difference in interest is the money you save.
- Extra each month is added to every payment.
- Biweekly means paying half your payment every two weeks. That is 26 half-payments, or 13 full payments, a year. We model it as one-twelfth of your payment added every month, which is the same extra money spread evenly.
- Extra once a year is added at the payment number you choose and every 12 payments after.
- One-time lump sum is added once, at the payment you choose.
- Reverse mode asks the opposite question: what monthly payment would pay off today's balance in your target number of years? The extra needed is that payment minus your current one.
Worked example
You owe $320,000 at 6.5% with 27 years left. Your principal and interest payment is about $2,098 a month, and if you change nothing you will pay about $359,700 more in interest. Here is what different extras do on that loan:
| Strategy | Paid off | Time saved | Interest saved |
|---|---|---|---|
| Regular payments only | 27 yrs | — | — |
| +$100 a month | 24 yrs | 3 yrs | ≈ $47,300 |
| +$200 a month | 21 yrs 8 mo | 5 yrs 4 mo | ≈ $82,500 |
| Biweekly (≈ $175 extra a month) | 22 yrs 3 mo | 4 yrs 9 mo | ≈ $74,500 |
| One $10,000 lump sum now | 24 yrs 11 mo | 2 yrs 1 mo | ≈ $43,500 |
| +$500 a month | 17 yrs | 10 yrs | ≈ $150,500 |
In reverse mode, paying this balance off in 15 years instead of 27 takes a principal and interest payment of about $2,788, or roughly $690 a month extra.
What extra payments do not do
- They do not lower your required monthly payment on a standard fixed-rate loan. To turn a lump sum into a lower payment, ask about a mortgage recast.
- They do not let you skip a payment later. Paying ahead on principal is not the same as prepaying next month's bill.
- They do not change property taxes or insurance paid through escrow. Those are left out of this calculator.
- Money sent to the mortgage is hard to get back. Keep an emergency fund before you prepay.
Edge cases
- Adjustable-rate loans: the calculator holds your rate constant. If your rate resets, rerun it with the new rate and balance.
- Biweekly programs with fees: some third-party programs charge to set up biweekly payments. Adding one-twelfth of a payment each month gets nearly the same result for free.
- Low-rate loans: every extra dollar “earns” your mortgage rate. If your rate is low, compare against other uses for the money with the pay off or invest calculator.
What to do next
See the full month-by-month schedule in the amortization schedule calculator, read whether biweekly payments are worth it, or check whether a lower rate beats prepaying with the refinance break-even calculator.