What an extra payment really buys you
A mortgage front-loads interest: in the early years of a 30-year loan, well over half of every payment is interest, not equity. An extra payment attacks the balance directly, and because interest is charged on the balance, every prepaid dollar stops costing you interest for the rest of the term. That's why even a modest extra amount — the price of a streaming bundle — routinely removes years from the schedule when the remaining term is long.
This calculator first computes your required principal-and-interest payment from the standard amortization formula:
P = B · r(1+r)^n / ((1+r)^n − 1)
where B is the balance, r the monthly rate, and n the remaining months. It then simulates the loan month by month twice — once with the extra payment, once without — and reports the difference. The results are exact for a standard fixed-rate, monthly-compounding mortgage.
Timing: earlier extras save more
The savings from prepayment shrink as the loan matures, because there's less time left for the avoided interest to accumulate. If you're 25 years from payoff, an extra $200/month is powerful; at 5 years out, the same $200 mostly just accelerates paperwork. If prepaying is part of your plan, starting now is worth more than starting bigger later.
Before you prepay: a short checklist
Confirm your servicer applies extras to principal (most online payment forms have an explicit "additional principal" field). Check for prepayment penalties — uncommon on US conforming loans, more common elsewhere. Make sure higher-rate debt (credit cards, personal loans) is cleared first, and that you keep an emergency fund; home equity is illiquid, and you can't easily un-prepay a mortgage if cash gets tight.
Frequently asked questions
What about biweekly payments?
Paying half your monthly payment every two weeks results in 26 half-payments — 13 full payments a year instead of 12. It's mathematically almost identical to adding one twelfth of your payment as a monthly extra, which you can model above by entering payment ÷ 12 in the extra field.
Does this include property taxes and insurance?
No. The payment shown is principal and interest only. Your actual monthly bill likely includes escrow for taxes and insurance, which prepayment doesn't change.
Is a lump-sum prepayment better than monthly extras?
Money applied earlier saves more, so a lump sum today beats the same total drip-fed over years. You can approximate a lump sum here by reducing the starting balance by that amount and setting the extra to zero, then comparing.