Extra Payment Calculator
See how making extra mortgage payments can save you thousands in interest and help you pay off your loan years early.
Loan Details
Your Savings
Interest Saved
$116,640
Time Saved
7y 1m
New Payoff Date
22y 11m
Payment Comparison
Important Notes
- • Specify "apply to principal" when making extra payments
- • Check for prepayment penalties in your loan agreement
- • Consider building an emergency fund before extra payments
- • Bi-weekly payments automatically add 1 extra payment per year
Pro Tips
Start Small
Even $100/month makes a big difference
Be Consistent
Regular payments beat occasional large ones
Use Windfalls
Apply bonuses and tax refunds to principal
Round Up
Round payments to nearest $100
Bi-Weekly Benefits
Switching to bi-weekly payments on a $300,000 loan at 7%:
Extra Payment Impact by Amount (2026)
As of 2026, here's how different extra payment amounts impact a $300,000 30-year loan at 7%:
| Extra Payment | Interest Saved | Time Saved | New Payoff |
|---|---|---|---|
| $100.00/mo | $45,000 | 4 years | 26 years |
| $200.00/mo | $80,000 | 7 years | 23 years |
| $300.00/mo | $110,000 | 9 years | 21 years |
| $500.00/mo | $160,000 | 12 years | 18 years |
Key Insight: Adding just $200.00 per month saves you $80,000 in interest and pays off your loan 7 years early. That's like getting a 7% guaranteed return on your investment!
Frequently Asked Questions
How much can I save by making extra payments?
Making extra payments can save you tens of thousands of dollars in interest. For example, on a $300,000 30-year mortgage at 7%, adding just $200 per month can save you over $80,000 in interest and pay off your loan 7 years early. The exact savings depend on your loan amount, interest rate, and how much extra you pay.
What is bi-weekly mortgage payment?
Bi-weekly mortgage payments involve making half of your monthly payment every two weeks, resulting in 26 half-payments (13 full payments) per year instead of 12. This extra payment each year can significantly reduce your loan term and interest costs. Most 30-year mortgages can be paid off in about 25-26 years with bi-weekly payments.
Should I make extra payments or invest the money?
This depends on your mortgage rate vs. potential investment returns. If your mortgage rate is 7% and you can earn 8%+ investing, investing might be better. However, paying off your mortgage provides guaranteed returns (your interest rate) and eliminates debt risk. Consider your risk tolerance, tax situation, and financial goals.
Can I make extra payments anytime?
Yes, most mortgages allow extra payments anytime. You can make a one-time lump sum payment or increase your monthly payment. Specify that the extra payment should go toward principal reduction, not future payments. Check your loan agreement for any prepayment penalties.
What is the best way to make extra payments?
The most effective strategies are: 1) Bi-weekly payments (automatic extra payment each year), 2) Round up your payment to the next $100, 3) Apply windfalls (bonuses, tax refunds) to principal, 4) Increase your payment by 1% of your income each year. Consistency matters more than amount.
Will making extra payments affect my taxes?
Yes, paying off your mortgage faster reduces your mortgage interest deduction. However, the tax savings from mortgage interest (typically 22-37% of interest paid) is usually less than the interest you save. Consider your overall tax situation and consult a tax professional.
What is mortgage recasting?
Mortgage recasting is when you make a large lump-sum payment toward principal, and your lender recalculates your monthly payment based on the new lower balance, keeping the same term. This reduces your monthly payment without refinancing. Most lenders require a minimum payment ($5,000-$10,000) and charge a small fee ($200-$500).
Should I pay off high-interest debt first?
Generally, yes. Credit card debt (15-25% APR) should be paid off before extra mortgage payments (6-8% APR). The guaranteed return from eliminating high-interest debt is higher. However, consider your overall financial picture, including emergency fund and retirement savings.
Can I skip payments if I've made extra payments?
This depends on your lender and loan type. Some lenders allow you to skip payments if you've paid ahead (called "payment holidays"), but this isn't guaranteed. Extra payments typically reduce your principal faster rather than creating a payment reserve. Check with your lender before assuming you can skip payments.
How do I ensure extra payments go to principal?
When making extra payments, clearly indicate "apply to principal" on your check or payment memo. For online payments, look for a "principal only" payment option. If unsure, call your lender to confirm how extra payments are applied. Never assume they'll automatically go to principal.