1. What is the Home Loan Extra Repayment Calculator?

The Home Loan Extra Repayment Calculator helps you understand how making additional payments on your mortgage can reduce your total interest paid and shorten your loan term.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

• \( P \) — Principal loan amount (USD)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Number of months in loan term
• \( PMT \) — Monthly payment amount

Extra Payments: The calculator then applies your specified extra payment each month, showing how it affects your total interest and loan term.

3. Benefits of Extra Repayments

Details: Even small extra payments can significantly reduce total interest and shorten your loan term. For example, an extra $100/month on a $300,000 loan at 4% over 30 years could save ~$28,000 and cut 5 years off your loan.

4. Using the Calculator

Tips: Enter your loan details and any additional monthly payment you plan to make. The calculator will show your regular payment and the savings from extra payments.

5. Frequently Asked Questions (FAQ)

Q1: How do extra payments affect my loan?
A: Extra payments reduce your principal faster, which reduces total interest and can shorten your loan term.

Q2: Is it better to make extra payments or refinance?
A: It depends on your interest rate difference and fees. This calculator helps compare options.

Q3: Are there penalties for extra payments?
A: Some loans have prepayment penalties. Check your loan terms before making extra payments.

Q4: Should I pay extra or invest the money?
A: This depends on your loan rate vs. expected investment returns. Generally, pay extra if your loan rate is higher than conservative investment returns.

Q5: How often should I make extra payments?
A: Regular extra payments (monthly) have the greatest impact, but even occasional lump sums help.