On top of your regular payment.

How this calculator works

The payoff date follows from the balance, the rate, and the payment. With interest compounded semi-annually and converted to a monthly rate, the number of remaining payments is n = −ln(1 − i·B/P) / ln(1 + i), where B is the balance, P the payment, and i the monthly rate.

The reason a small extra payment has an outsized effect is that every extra dollar reduces the balance that interest is charged on for every remaining month. On a long amortization the effect compounds, which is why increasing the payment usually beats making a single lump sum of the same total size spread over time — though both help.

Assumptions and limits

This is an educational estimate produced entirely in your browser. It is not an offer of credit, an approval, or financial advice, and it does not use your real credit file. Lenders apply their own policy, pricing, and verification.

Frequently asked questions

Does extra go to principal or interest?

On a fixed-payment mortgage, the regular payment first covers that period's interest, and the remainder reduces the principal. An extra payment goes entirely to principal.

Will my lender apply extra payments automatically?

Not always. Confirm how the lender applies extra amounts, and whether you must instruct them to apply it to principal rather than to the next scheduled payment.

Is increasing my payment better than a lump sum?

Increasing the regular payment reduces the balance sooner and is often the more effective of the two, because the extra reduces interest every month thereafter. Lump sums help too, and within your privileges neither triggers a penalty.

What if my payment does not cover the interest?

Then the balance never falls and would grow. That usually means the payment was calculated for a longer amortization or a lower rate than currently applies.

Does this account for prepayment penalties?

No. It assumes the extra payment stays within your mortgage's prepayment privileges. Exceeding them can trigger a prepayment charge.

Sources

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