1. What is the Home Loan Extra Repayment Calculator?

This calculator determines your monthly home loan payment and shows how making extra repayments can reduce your loan term and total interest paid. It uses the standard loan payment formula with adjustments for additional payments.

2. How Does the Calculator Work?

The calculator uses the 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 (USD)

For extra payments: The calculator recalculates the amortization schedule with the additional payment amount to determine interest savings and reduced term.

3. Importance 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% can save thousands in interest and pay off the loan years earlier.

4. Using the Calculator

Tips: Enter your loan amount, interest rate, and term. Add any extra monthly payment you can afford to see potential savings. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How much can I save with extra payments?
A: Savings depend on loan amount, rate, term, and extra payment amount. Even $50-100 extra per month can make a significant difference over time.

Q2: Should I pay extra principal or invest?
A: Compare your loan interest rate with potential investment returns. Paying down debt is a guaranteed return equal to your interest rate.

Q3: Are there prepayment penalties?
A: Some loans have prepayment penalties - check your loan terms before making large extra payments.

Q4: How often should I make extra payments?
A: Monthly is most effective, but any extra helps. Specify "for principal only" to ensure proper application.

Q5: Does this account for changing interest rates?
A: No, this assumes a fixed rate. For adjustable rate loans, results would vary as rates change.