How extra mortgage payments work
Your regular mortgage payment is split between interest (the lender's fee) and principal (the actual balance). Early in the loan, most of each payment goes to interest. When you pay extra, that entire extra amount goes straight to principal — shrinking the balance that future interest is calculated on. The effect compounds, which is why even a modest extra payment can erase years from the loan.
Where the savings come from
A lower balance means less interest accrues next month, which means more of your next regular payment also goes to principal. This snowballs over time. The calculator above shows the real number for your loan.
Should you pay extra at all?
- Yes, if you have no higher-interest debt (like credit cards), a healthy emergency fund, and your mortgage rate is higher than what you'd safely earn investing.
- Maybe not, if your rate is low and you could earn more by investing the difference, or if it would leave you cash-strapped.
Frequently asked questions
Does this store my information?
No. Everything runs locally in your browser. Nothing is saved or sent anywhere.
Should I tell my lender the extra is for principal?
Yes — make sure extra payments are applied to principal, not held as a prepayment of the next month's bill. Most lenders have a "principal only" option.
What about property tax and insurance?
This calculator models the loan principal and interest only. Escrow items like tax and insurance don't change how fast the loan itself is paid off.
For educational and estimation purposes only; not financial advice. Assumes a fixed rate and consistent payments. Consult a qualified professional before making decisions.