Frequently Asked Questions
How much interest can I save by making extra mortgage payments?
The amount depends on your loan balance, interest rate, term, and how much extra you pay. On a $350,000 loan at 6.5% over 30 years, an extra $200/month saves approximately $108,000 in interest and pays off the loan about 6 years early.
Do I need to tell my lender I'm making extra payments?
You should verify that your lender applies extra payments to principal (not future interest). Most modern loans handle this automatically when you pay above the minimum, but some require you to specify "principal only" online or by phone.
Should I pay off my mortgage early or invest the extra money?
If your mortgage rate is 6%+, paying it down is a guaranteed, risk-free return equal to your rate. The stock market historically returns 7-10%, but with volatility. Many advisors recommend: emergency fund first, retirement accounts second, then split extra money between debt and investments based on your risk tolerance.
Is the calculator accurate for my specific loan?
We use standard fixed-rate amortization formulas identical to what your lender uses. Results match to the penny for conventional fixed-rate mortgages. For ARMs, interest-only loans, or loans with prepayment penalties, consult your lender directly.
Are there downsides to paying off my mortgage early?
Potential downsides include reduced liquidity, opportunity cost if investments could outperform your mortgage rate, and (rarely) prepayment penalties. Most conventional loans have no prepayment penalty.
Does paying extra change my monthly payment?
No. Making extra principal payments does not lower your required monthly payment. What changes is your payoff date and total interest paid. Your minimum payment stays the same until the loan is fully paid off.
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Will my lender let me make extra payments?
Almost certainly. Prepayment penalties have become rare on conventional fixed-rate mortgages, though they still exist on some loans. Check the note you signed — the section is usually headed "Prepayment" — before making a large lump-sum payment.
How do I make sure the extra money reduces my balance?
This is the most common way extra payments quietly fail. Unless you specify otherwise, a servicer may treat extra money as an early payment of next month's bill rather than as a principal reduction. Use the "additional principal" field in your payment portal if there is one, then check the next statement: your balance should have fallen by the normal principal portion plus the full extra amount. If it has not, call and ask them to reapply it.
Is a lump sum or a monthly extra better?
Timing matters more than form. A dollar applied to principal earlier cancels more future interest than the same dollar applied later, so an annual bonus paid in January does more than the same amount in December. In practice a consistent monthly amount usually wins, because it is a habit rather than a decision you have to make again each year.
What is recasting, and how is it different?
Recasting means paying a lump sum and asking your servicer to re-amortize the remaining balance over the original end date. Your rate and payoff date stay the same but your monthly payment drops. It helps cash flow rather than total interest, usually costs a small fee, and not all loans allow it. Extra payments do the opposite — same payment, earlier payoff.
Should I pay off the mortgage or clear other debt first?
As a rule, clear the higher rate first. Paying down a 6.5% mortgage while carrying a credit card at 24% is a net loss on every dollar. The usual order is: a basic emergency fund, then any employer retirement match, then high-interest debt, then the mortgage.
Does paying extra hurt my credit score?
No. Reducing an instalment loan balance faster does not damage your score. Closing the account when the mortgage is finally paid off can cause a small, temporary dip because your mix of open accounts changes, but that is a minor and short-lived effect.
What about the mortgage interest deduction?
Paying less interest means less interest to deduct, where such a deduction applies to you at all — many households take a standard deduction and get no benefit from it. It is a real consideration but a secondary one: you never save money by paying a dollar of interest to avoid paying a fraction of that in tax. Confirm your own position with a tax professional.
Does the calculator handle adjustable-rate mortgages?
Not properly. It assumes one fixed rate for the life of the loan. You can use it to model the current rate period, but any projection past the first reset will not reflect what an ARM actually does.
Do you store the numbers I enter?
No. Every calculation happens in your browser. Nothing is transmitted or saved, and closing the tab discards it.