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Loan Payment Formula:
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The Home Loan Additional Repayment Calculator helps you understand how making extra payments on your mortgage can reduce your loan term and total interest paid. It uses the standard loan payment formula adjusted for additional repayments.
The calculator uses the standard loan payment formula:
Where:
Extra Payments: The calculator then applies your additional monthly payment to reduce the principal faster, recalculating the remaining balance and interest each month.
Details: Even small additional payments can significantly reduce your loan term and total interest paid. For example, an extra $100/month on a $300,000 loan at 4% over 30 years could save over $28,000 in interest and cut 4 years off your loan term.
Tips: Enter your loan amount, interest rate, and term. Then add any additional monthly payment you plan to make. The calculator will show your savings in interest and time.
Q1: How much can I save with extra payments?
A: Savings depend on your loan amount, interest rate, and how much extra you pay. Even small amounts add up significantly over time.
Q2: Should I pay extra principal or refinance?
A: If your rate is already low, extra payments may be better than refinancing. Compare savings from both options.
Q3: Are there penalties for extra payments?
A: Most loans allow extra payments, but some have prepayment penalties. Check your loan terms.
Q4: Is it better to pay extra monthly or lump sums?
A: Monthly extra payments have the greatest impact, but any extra helps. The sooner you reduce principal, the more you save.
Q5: How does this affect my taxes?
A: Extra payments reduce your mortgage interest, which may reduce your mortgage interest deduction. Consult a tax professional.