Extra Mortgage Payment Calculator

Why Extra Payments Work

Extra payments go directly toward principal, reducing the balance faster. This means less interest accrues over time, creating a snowball effect that accelerates payoff dramatically.

Extra Payment Strategies

• Monthly Extra: Most effective, steady progress
• Biweekly Payments: Equivalent to one extra monthly payment per year
• Annual Lump Sum: Use tax refund or bonus
• Round Up: Round payment to nearest $100

The Math Behind Extra Payments

Early in your mortgage, most of each payment goes to interest. On a $300,000 loan at 6.5%, your first payment of ~$1,896 includes $1,625 in interest and only $271 toward principal.

An extra $200/month in year one nearly doubles your principal payment, building equity and reducing interest much faster.

When Extra Payments Make Sense

• Mortgage rate exceeds investment returns (after tax)
• Desire to be debt-free before retirement
• Building equity for future home purchase
• Peace of mind from reduced debt

When to Consider Alternatives

• High-interest debt exists (pay that first)
• No emergency fund (build 3-6 months first)
• Not maximizing 401(k) match (free money)
• Mortgage rate very low (may invest instead)

Tips for Success

• Ensure payments are applied to principal (not prepaid interest)
• Check for prepayment penalties (rare, but verify)
• Automate extra payments for consistency
• Recalculate if you refinance