1. What is a Mortgage Calculator With Extra Payments?

This calculator helps you understand how making extra payments or lump sum payments can reduce your mortgage balance and total interest paid over the life of the loan.

2. How Does the Calculator Work?

The calculator uses the standard mortgage formula:

Where:

• \( M \) — Monthly mortgage payment
• \( P \) — Principal loan amount (after lump sum deduction)
• \( r \) — Monthly interest rate (annual rate divided by 12)
• \( n \) — Number of payments (loan term in years × 12)

Extra Payments: Any additional amount you pay each month reduces the principal faster.

Lump Sum: A one-time payment that immediately reduces your principal balance.

3. Benefits of Extra Payments and Lump Sums

Details: Making extra payments can significantly reduce the total interest paid and shorten the loan term. Even small additional payments can have a big impact over time.

4. Using the Calculator

Tips: Enter your current loan balance, interest rate, and remaining term. Then add any planned extra monthly payments or lump sum amounts to see how they affect your mortgage.

5. Frequently Asked Questions (FAQ)

Q1: How much can I save with extra payments?
A: Even $100 extra per month can save thousands in interest and reduce your loan term by several years.

Q2: When is the best time to make a lump sum payment?
A: The earlier you make lump sum payments, the more interest you'll save over the life of the loan.

Q3: Should I pay extra or invest the money?
A: Compare your mortgage interest rate with potential investment returns. Paying down high-interest debt usually makes sense.

Q4: Are there prepayment penalties?
A: Some loans have prepayment penalties - check your mortgage terms before making large extra payments.

Q5: How does this affect my amortization schedule?
A: Extra payments reduce principal faster, which means more of each subsequent payment goes toward principal rather than interest.