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Mortgage Payment Formula:
Where:
P = Loan amount
r = Monthly interest rate (annual rate ÷ 12)
n = Number of payments (loan term in years × 12)
| From: | To: |
This calculator helps you understand how making extra monthly payments can reduce your loan term and total interest paid. It shows your regular payment, extra payment, and adjusted payment amounts.
The calculator uses the standard mortgage payment formula:
Where:
Explanation: The adjusted payment simply adds your extra payment amount to the calculated standard payment.
Details: Even small extra payments can significantly reduce your loan term and total interest. For example, an extra $100/month on a $300,000 loan at 4% for 30 years can save ~$28,000 in interest and pay off the loan 5 years earlier.
Tips: Enter your loan details and any planned extra payment. The calculator shows your standard payment and the adjusted payment including extras.
Q1: How do extra payments affect my loan?
A: Extra payments reduce principal faster, which reduces total interest and can shorten your loan term.
Q2: Should I make extra payments or invest?
A: Depends on your interest rate vs. expected investment returns. Paying off debt is a guaranteed return.
Q3: Are there prepayment penalties?
A: Most modern loans don't have them, but check your loan terms to be sure.
Q4: How should I designate extra payments?
A: Specify they should go toward principal reduction, not future payments.
Q5: Is it better to make biweekly payments?
A: Biweekly payments (half every 2 weeks) result in 13 full payments/year instead of 12, which can be effective.