1. What Is This Calculator?

This calculator computes your monthly mortgage payment and shows how additional principal payments can reduce your loan term and total interest paid. It generates a complete amortization schedule showing the breakdown of each payment.

2. How The Calculation Works

The calculator uses the standard mortgage payment formula:

Where:

• \( P \) — Principal loan amount (USD)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Total number of payments (term in years × 12)

Additional payments are applied directly to principal, reducing the remaining balance faster and decreasing total interest paid.

3. Benefits Of Additional Payments

Key Advantages: Even small additional payments can significantly reduce your loan term and total interest. For example, adding $100/month to a $200,000 loan at 4% can save ~$28,000 and pay off the loan 5 years early.

4. Using The Calculator

Instructions: Enter your loan amount, interest rate, term in years, and any additional monthly payment you plan to make. The calculator will show your regular payment, total with extra payment, and projected savings.

5. Frequently Asked Questions

Q1: How do extra payments affect amortization?
A: Extra payments reduce principal faster, which decreases future interest calculations and shortens the loan term.

Q2: Should I pay extra principal or invest?
A: This depends on your interest rate vs. expected investment returns. Paying down debt provides a guaranteed return equal to your interest rate.

Q3: Are there prepayment penalties?
A: Most modern mortgages don't have prepayment penalties, but check your loan terms to be sure.

Q4: When is the best time to make extra payments?
A: Earlier payments have the greatest impact since they reduce principal before more interest accrues.

Q5: How accurate is this calculator?
A: It provides accurate estimates for fixed-rate loans. For adjustable-rate mortgages, results may vary as rates change.