Making extra payments toward your mortgage principal is one of the most effective guaranteed returns on investment available to homeowners. By paying more than your required monthly installment, you directly reduce the principal balance, which in turn reduces the amount of interest charged in every subsequent month.
This calculator helps you visualize exactly how a small additional contribution—whether it's $50, $100, or $500 a month—can drastically shorten your loan term and save you thousands of dollars in interest over the life of the loan.
How Amortization Works
Mortgages use an amortization schedule where early payments are primarily composed of interest, while later payments go mostly toward the principal. When you make an extra principal-only payment, you skip ahead in the amortization schedule. This means you eliminate future interest charges that would have accrued on that principal amount.
Benefits of Accelerating Your Mortgage
Interest Savings: Even small extra payments can save tens of thousands of dollars in interest.
Debt-Free Sooner: Build full equity in your home years ahead of schedule.
Financial Freedom: Eliminating your largest monthly expense frees up cash flow for retirement savings or other investments.
Equity Building: You own more of your home faster, providing a buffer against market fluctuations.
Example Calculation
Consider a homeowner with a $200,000 remaining balance on a 30-year fixed mortgage at 4.5% interest. The standard principal and interest payment is approximately $1,013.
If this homeowner adds just $100 extra per month toward the principal:
They would pay off the loan roughly 4 years and 7 months early.
They would save approximately $26,500 in interest.
Use the calculator above to input your specific numbers and see your potential savings instantly.
function calculateSavings() {
// 1. Get Input Values
var balance = parseFloat(document.getElementById('loanBalance').value);
var rate = parseFloat(document.getElementById('interestRate').value);
var years = parseFloat(document.getElementById('remainingYears').value);
var extra = parseFloat(document.getElementById('extraPayment').value);
// 2. Validation
if (isNaN(balance) || balance <= 0) {
alert("Please enter a valid loan balance.");
return;
}
if (isNaN(rate) || rate < 0) {
alert("Please enter a valid interest rate.");
return;
}
if (isNaN(years) || years <= 0) {
alert("Please enter a valid remaining term.");
return;
}
// Default extra to 0 if empty
if (isNaN(extra) || extra 0) {
// Calculate interest for this month
var interestForMonth = currentBalance * monthlyRate;
// Add to total interest counter
totalInterestNew += interestForMonth;
// Calculate principal portion
var principalForMonth = totalPayment – interestForMonth;
// Ensure we don't overpay the last month
if (principalForMonth > currentBalance) {
principalForMonth = currentBalance;
// Adjust interest for final partial month?
// Simplified: usually interest is calculated on start balance, so interest remains valid,
// but we stop the loop.
}
// Reduce balance
currentBalance -= principalForMonth;
monthsElapsed++;
// Safety break for infinite loops (e.g., if interest > payment)
if (monthsElapsed > 1000) {
alert("The extra payment is too low to cover interest, or the term is too long.");
return;
}
}
// 4. Calculate Differences
var monthsSaved = totalMonthsOriginal – monthsElapsed;
var interestSaved = totalInterestOriginal – totalInterestNew;
// Handle floating point errors
if (interestSaved 0) timeSavedString += savedYears + " Years ";
if (savedMonths > 0) timeSavedString += savedMonths + " Months";
if (monthsSaved <= 0) timeSavedString = "0 Months (No change)";
document.getElementById('timeSaved').innerHTML = timeSavedString;
document.getElementById('totalSaved').innerHTML = formatMoney(interestSaved);
document.getElementById('newTotalInterest').innerHTML = formatMoney(totalInterestNew);
// Show results
document.getElementById('results').style.display = "block";
}