Mortgage Prepayment Calculator
See how much interest you save and how many years you cut by paying extra principal on your mortgage each month. Runs in your browser.
Prepayment impact
- Base monthly payment
- $1,896
- Payoff (no extra)
- 30 yr 0 mo
- Payoff (with extra)
- 23 yr 1 mo
- Time saved
- 6 yr 11 mo
- Interest saved
- $103,449
Extra principal goes straight to the balance, cutting all future interest and shortening the term. Confirm your servicer applies extra payments to principal (not next month's payment), and check for any prepayment penalty. Compare the guaranteed return (your mortgage rate) against investing the same money. Informational, not financial advice.
About this tool
Paying a little extra toward your mortgage principal each month has an outsized effect, because every extra dollar removes not just itself but all the future interest it would have accrued over the remaining decades of the loan. This calculator amortizes your mortgage with and without an extra monthly principal payment and shows the difference: the new payoff date, the years and months shaved off, and the total interest saved. The savings are often striking — a couple hundred dollars a month on a 30-year loan can cut years off the term and tens of thousands in interest. Two practical notes it raises: make sure your servicer applies extra payments to principal rather than holding them toward the next bill, and check your loan for a prepayment penalty (most modern mortgages have none). It is also worth weighing the guaranteed 'return' of prepaying (your mortgage rate) against investing the same money, especially if your rate is low. It is informational, not financial advice. Everything runs in your browser.
How to use it
- Enter your loan balance, interest rate, and remaining term in months.
- Enter the extra principal you'd pay each month.
- Read the new payoff date, time saved, and interest saved.
- Confirm your servicer applies extra to principal, and compare against investing.
Frequently asked questions
- How does extra principal save so much interest?
- Each extra dollar permanently reduces the balance that all future interest is charged on. Early in a mortgage, most of your regular payment is interest, so extra principal then is especially powerful — it eliminates years of compounding interest on that amount.
- Is it better to prepay the mortgage or invest?
- Prepaying earns a guaranteed return equal to your mortgage rate, tax-considerations aside. If your rate is high, prepaying is attractive; if it is low, investing may earn more over time (though with risk). It is partly a math question and partly about risk tolerance and peace of mind.
- Will my servicer apply extra payments correctly?
- Not automatically always — some apply extra to the next scheduled payment instead of principal. Specify "apply to principal" and verify on your statement, or the interest savings will not materialize.
- Are there prepayment penalties?
- Most modern US mortgages have no prepayment penalty, but some (especially older or non-conforming loans) do. Check your loan documents before making large extra payments.
- Does a one-time lump sum help too?
- Yes — any extra principal, monthly or lump sum, reduces interest and term. This tool models a recurring monthly extra; a lump sum has a similar (front-loaded) effect. Recasting the loan after a lump sum can also lower the required payment.
- Is this financial advice?
- No. It is an informational calculation. Consider your full financial picture or consult an advisor.