Calculate your monthly mortgage payment and see how extra payments can save you time and money.
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Understanding Your Mortgage Payment and the Impact of Extra Payments
A mortgage is a significant financial commitment, and understanding how your payments are structured is crucial. This calculator helps you determine your regular monthly mortgage payment and illustrates the powerful effect of making additional payments beyond your scheduled amount. By adding even a small extra amount consistently, you can significantly reduce the total interest paid and shorten the life of your loan.
How Your Monthly Mortgage Payment is Calculated
The standard monthly mortgage payment (Principal & Interest) is calculated using the following formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Your total monthly mortgage payment (Principal & Interest)
P = The principal loan amount (the amount you borrowed)
i = Your monthly interest rate (annual interest rate divided by 12)
n = The total number of payments over the loan's lifetime (loan term in years multiplied by 12)
For example, if you borrow $300,000 at an annual interest rate of 4.5% for 30 years, your monthly interest rate (i) would be 4.5% / 12 = 0.00375, and the total number of payments (n) would be 30 * 12 = 360.
The Power of Extra Payments
When you make an extra payment on your mortgage, that additional amount goes directly towards reducing your loan's principal balance. Paying down the principal faster has a compounding effect:
Reduced Interest Paid: A lower principal balance means less interest accrues over time. Even small, consistent extra payments can lead to substantial savings on interest over the life of the loan.
Shorter Loan Term: By consistently reducing the principal, you effectively pay off your loan faster than the original schedule.
This calculator takes your regular monthly payment and adds your specified extra monthly payment. It then recalculates the loan payoff timeline and total interest paid, demonstrating the financial benefits. The "Total Savings" shown is the difference in total interest paid between paying only the minimum and making the extra payments.
When to Consider Extra Payments:
Financial Stability: Ensure you have a solid emergency fund and no high-interest debt before making extra mortgage payments.
Loan Terms: Some loans may have prepayment penalties, though this is less common with traditional residential mortgages. Check your loan documents.
Lump Sums: Consider making extra principal payments with windfalls like tax refunds or bonuses.
Using this calculator can help you visualize your financial goals and make informed decisions about accelerating your mortgage payoff.
function calculateMortgage() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var loanTermYears = parseInt(document.getElementById("loanTermYears").value);
var extraPaymentMonthly = parseFloat(document.getElementById("extraPaymentMonthly").value);
// Validate inputs
if (isNaN(loanAmount) || isNaN(annualInterestRate) || isNaN(loanTermYears) || isNaN(extraPaymentMonthly) ||
loanAmount <= 0 || annualInterestRate < 0 || loanTermYears 0) {
monthlyPaymentRegular = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
} else {
monthlyPaymentRegular = loanAmount / numberOfPayments; // Handle 0% interest
}
// — Calculation with extra payments —
var remainingBalance = loanAmount;
var totalPaidWithExtra = 0;
var totalInterestPaidWithExtra = 0;
var monthsPaidWithExtra = 0;
var totalPaymentAmount = monthlyPaymentRegular + extraPaymentMonthly;
// Prevent infinite loops if payments don't cover interest
if (totalPaymentAmount 0) {
document.getElementById("monthlyPayment").textContent = "Payment too low to cover interest";
document.getElementById("totalPaid").textContent = "-";
document.getElementById("totalInterest").textContent = "-";
document.getElementById("loanPaidOffInMonths").textContent = "-";
document.getElementById("loanPaidOffInYears").textContent = "-";
document.getElementById("totalSavings").textContent = "-";
return;
}
while (remainingBalance > 0) {
var interestForMonth = remainingBalance * monthlyInterestRate;
var principalForMonth = totalPaymentAmount – interestForMonth;
// Ensure principal payment doesn't exceed remaining balance
if (principalForMonth > remainingBalance) {
principalForMonth = remainingBalance;
totalPaymentAmount = interestForMonth + principalForMonth; // Adjust final payment if needed
}
remainingBalance -= principalForMonth;
totalInterestPaidWithExtra += interestForMonth;
totalPaidWithExtra += totalPaymentAmount; // Accumulate total payment, including the principal portion of extra payments
monthsPaidWithExtra++;
// Safety break for extreme cases, though the above logic should handle it
if (monthsPaidWithExtra > loanTermYears * 12 * 5) { // Limit to 5 times the original term
document.getElementById("monthlyPayment").textContent = "Calculation Error";
return;
}
// If the last payment is smaller, adjust total paid and interest
if (remainingBalance 0) durationString += years + " year" + (years !== 1 ? "s" : "");
if (months > 0) durationString += (years > 0 ? " " : "") + months + " month" + (months !== 1 ? "s" : "");
document.getElementById("loanPaidOffInYears").textContent = durationString;
document.getElementById("totalSavings").textContent = "Total Interest Savings: $" + totalSavings.toFixed(2);
}