Mortgage Amortization Calculator Paying Extra

Amortization Formulas:

\[ I_k = B_{k-1} \times r \] \[ P_k = M + E - I_k \] \[ B_k = B_{k-1} - P_k \]

Loan Amount:

USD

Interest Rate:

Loan Term:

years

Extra Monthly Payment:

USD

Monthly Payment:

Total With Extra:

Months to Payoff:

Interest Saved:

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1. What is a Mortgage Amortization Calculator with Extra Payments?

Definition: This calculator shows how making extra payments affects your mortgage payoff timeline and total interest paid.

Purpose: It helps homeowners understand the financial benefits of paying extra toward their mortgage principal.

2. How Does the Calculator Work?

The calculator uses these amortization formulas:

\[ I_k = B_{k-1} \times r \] \[ P_k = M + E - I_k \] \[ B_k = B_{k-1} - P_k \]

Where:

$ I_k $ — Interest portion of payment (USD)
$ P_k $ — Principal portion of payment (USD)
$ B_k $ — Remaining balance after payment (USD)
$ r $ — Monthly interest rate (decimal)
$ M $ — Regular monthly payment (USD)
$ E $ — Extra payment amount (USD)

Explanation: Each month's interest is calculated on the remaining balance, then the extra payment is applied directly to principal.

3. Benefits of Extra Mortgage Payments

Details: Making extra payments can significantly reduce your loan term and total interest paid, often saving tens of thousands of dollars.

4. Using the Calculator

Tips: Enter your loan details and any extra amount you plan to pay monthly. The calculator shows your new payoff timeline and interest savings.

5. Frequently Asked Questions (FAQ)

Q1: How much can I save with extra payments?
A: Even small extra payments can save thousands. For example, $100 extra on a $300k loan at 4% saves ~$30k and 5 years.

Q2: Should I pay extra or invest instead?
A: This depends on your mortgage rate vs. expected investment returns. Paying extra gives a guaranteed return equal to your interest rate.

Q3: Are there prepayment penalties?
A: Most modern mortgages don't have them, but check your loan terms to be sure.

Q4: When is the best time to make extra payments?
A: Early in the loan when interest charges are highest. Even one extra payment per year makes a big difference.

Q5: How do I specify extra payments go to principal?
A: Most lenders apply extra to principal automatically, but confirm with your lender and specify "for principal only" when paying.