Calculate how much extra principal you've paid and the potential interest savings.
Results:
Total Principal Paid by Payment #N/A: N/A
Total Interest Paid by Payment #N/A: N/A
Total Principal Paid (Standard Schedule): N/A
Total Interest Paid (Standard Schedule): N/A
Extra Principal Paid Over Standard Schedule: N/A
Potential Interest Savings: N/A
Understanding Mortgage Principal Payments
A mortgage is a significant financial commitment, and understanding how your payments are allocated is crucial for effective financial planning. Each monthly mortgage payment consists of two main components: principal and interest. A portion of your payment goes towards reducing the outstanding loan balance (principal), while the rest covers the cost of borrowing (interest).
The Math Behind Mortgage Payments
The standard mortgage payment is calculated using the following formula for monthly payment (M):
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
P = Principal loan amount
i = Monthly interest rate (Annual rate / 12)
n = Total number of payments (Loan term in years * 12)
In the early years of a mortgage, a larger portion of your payment goes towards interest, and a smaller portion goes towards the principal. As time progresses, this ratio shifts, and more of your payment is applied to the principal.
What is an "Extra Principal Payment"?
An extra principal payment is any amount you pay towards your mortgage that exceeds your scheduled monthly principal and interest payment. This could be a fixed amount added to each payment (e.g., an extra $100 per month) or a lump sum payment made periodically.
How Extra Principal Payments Work
When you make an extra principal payment, it is applied directly to reduce your outstanding loan balance. This has two major benefits:
Faster Equity Building: By reducing the principal balance more quickly, you build equity in your home faster.
Significant Interest Savings: Because interest is calculated on the remaining principal balance, a lower balance means you pay less interest over the life of the loan. Furthermore, any future payments will be applied to this now-lower principal, accelerating the payoff timeline and saving you even more on interest.
Why Use a Principal Payment Calculator?
This calculator helps you visualize the impact of making extra principal payments. You can input your original loan details, your current payment number, and any extra principal you plan to pay. The calculator will then show you:
The total principal and interest paid up to your specified payment number.
How much extra principal you have effectively paid compared to a standard payment schedule.
The estimated interest savings you can achieve by making these extra payments.
By understanding these figures, you can make informed decisions about your mortgage, whether your goal is to pay off your loan early, save money on interest, or simply understand your amortization schedule better.
function calculateMortgagePayment(principal, monthlyRate, termMonths) {
if (monthlyRate === 0) {
return principal / termMonths;
}
var numerator = principal * monthlyRate * Math.pow(1 + monthlyRate, termMonths);
var denominator = Math.pow(1 + monthlyRate, termMonths) – 1;
return numerator / denominator;
}
function calculatePrincipalDifference() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var loanTermYears = parseFloat(document.getElementById("loanTermYears").value);
var paymentNumber = parseInt(document.getElementById("paymentNumber").value);
var extraPrincipalPayment = parseFloat(document.getElementById("extraPrincipalPayment").value);
var resultsDiv = document.getElementById("result");
var currentPaymentNumResultSpan = document.getElementById("currentPaymentNumResult");
var totalPrincipalPaidSpan = document.getElementById("totalPrincipalPaid");
var currentPaymentNumResultInterestSpan = document.getElementById("currentPaymentNumResultInterest");
var totalInterestPaidSpan = document.getElementById("totalInterestPaid");
var standardPrincipalPaidSpan = document.getElementById("standardPrincipalPaid");
var standardInterestPaidSpan = document.getElementById("standardInterestPaid");
var extraPrincipalPaidSpan = document.getElementById("extraPrincipalPaid");
var interestSavingsSpan = document.getElementById("interestSavings");
// Clear previous results
currentPaymentNumResultSpan.textContent = "N/A";
totalPrincipalPaidSpan.textContent = "N/A";
currentPaymentNumResultInterestSpan.textContent = "N/A";
totalInterestPaidSpan.textContent = "N/A";
standardPrincipalPaidSpan.textContent = "N/A";
standardInterestPaidSpan.textContent = "N/A";
extraPrincipalPaidSpan.textContent = "N/A";
interestSavingsSpan.textContent = "N/A";
resultsDiv.style.display = "none"; // Hide until calculation is done
// Input validation
if (isNaN(loanAmount) || isNaN(annualInterestRate) || isNaN(loanTermYears) || isNaN(paymentNumber) || isNaN(extraPrincipalPayment) ||
loanAmount <= 0 || annualInterestRate < 0 || loanTermYears <= 0 || paymentNumber <= 0 || extraPrincipalPayment loanTermMonths) {
alert("Current payment number cannot exceed the total loan term in months.");
return;
}
var standardMonthlyPayment = calculateMortgagePayment(loanAmount, monthlyInterestRate, loanTermMonths);
var totalPrincipalPaid = 0;
var totalInterestPaid = 0;
var remainingBalance = loanAmount;
var standardPrincipalAtPayment = 0;
var standardInterestAtPayment = 0;
var standardTotalPaid = 0;
// Calculate standard principal and interest up to the specified payment number
for (var i = 1; i remainingBalance) {
principalForPeriod = remainingBalance;
standardMonthlyPayment = principalForPeriod + interestForPeriod; // Adjust payment for the last period if needed
}
totalPrincipalPaid += principalForPeriod;
totalInterestPaid += interestForPeriod;
remainingBalance -= principalForPeriod;
if (i === paymentNumber) {
standardPrincipalAtPayment = totalPrincipalPaid;
standardInterestAtPayment = totalInterestPaid;
}
}
// Calculate values with extra principal payments
var totalPrincipalPaidWithExtra = 0;
var totalInterestPaidWithExtra = 0;
var remainingBalanceWithExtra = loanAmount;
var cumulativeExtraPrincipal = 0;
var cumulativeInterestSavings = 0;
var cumulativeStandardPrincipal = 0;
var cumulativeStandardInterest = 0;
for (var i = 1; i remainingBalanceWithExtra) {
principalForPeriod = remainingBalanceWithExtra; // Pay off remaining balance
paymentWithExtra = principalForPeriod + interestForPeriod; // The actual payment made
}
// Track standard payments for comparison
var standardInterestForPeriod = remainingBalance * monthlyInterestRate;
var standardPrincipalForPeriod = standardMonthlyPayment – standardInterestForPeriod;
if (standardPrincipalForPeriod > remainingBalance) {
standardPrincipalForPeriod = remainingBalance;
}
if(i <= loanTermMonths) {
cumulativeStandardPrincipal += standardPrincipalForPeriod;
cumulativeStandardInterest += standardInterestForPeriod;
}
// Update balance with extra payment
remainingBalanceWithExtra -= principalForPeriod;
// Accumulate interest and principal paid with extra payments
totalInterestPaidWithExtra += interestForPeriod;
totalPrincipalPaidWithExtra += principalForPeriod;
if (i <= paymentNumber) { // Only count up to the current payment number for the "up to payment #" results
cumulativeExtraPrincipal = totalPrincipalPaidWithExtra – cumulativeStandardPrincipal; // Difference in principal paid up to this point
cumulativeInterestSavings = cumulativeStandardInterest – totalInterestPaidWithExtra; // Difference in interest paid up to this point
}
// Ensure balance doesn't go negative due to floating point issues
if (remainingBalanceWithExtra < 0) remainingBalanceWithExtra = 0;
if (remainingBalance < 0) remainingBalance = 0;
// If loan is paid off, stop calculations
if (remainingBalanceWithExtra <= 0) break;
}
// Final calculation of total interest paid over the entire loan term (both scenarios)
var totalInterestOverLoanTerm = 0;
var balance = loanAmount;
for (var i = 1; i balance) principal = balance;
totalInterestOverLoanTerm += interest;
balance -= principal;
if (balance 0) {
var interest = balance * monthlyInterestRate;
var principal = standardMonthlyPayment + extraPrincipalPayment – interest;
// Check if this payment is the one that pays off the loan
if (principal >= balance) {
principal = balance; // Pay off the remaining balance
interest = balance * monthlyInterestRate; // Recalculate interest for the final payment
}
totalInterestOverLoanTermWithExtra += interest;
balance -= principal;
currentPayment++;
if (currentPayment > loanTermMonths * 2) break; // Safety break to prevent infinite loops
}
// Display results
currentPaymentNumResultSpan.textContent = paymentNumber;
totalPrincipalPaidSpan.textContent = (totalPrincipalPaid.toFixed(2)).toLocaleString();
currentPaymentNumResultInterestSpan.textContent = paymentNumber;
totalInterestPaidSpan.textContent = (totalInterestPaid.toFixed(2)).toLocaleString();
standardPrincipalPaidSpan.textContent = (cumulativeStandardPrincipal.toFixed(2)).toLocaleString();
standardInterestPaidSpan.textContent = (cumulativeStandardInterest.toFixed(2)).toLocaleString();
extraPrincipalPaidSpan.textContent = (cumulativeExtraPrincipal.toFixed(2)).toLocaleString();
interestSavingsSpan.textContent = (cumulativeInterestSavings.toFixed(2)).toLocaleString();
resultsDiv.style.display = "block"; // Show results
}