1. What is a Mortgage Calculator With Extra Payments?

Definition: This calculator determines how extra payments toward principal affect your mortgage payoff time and total interest paid.

Purpose: It helps homeowners understand the impact of making additional payments and plan their mortgage payoff strategy.

2. How Does the Calculator Work?

The calculator uses the recursive formula:

Where:

• \( B_k \) — Balance after month k ($)
• \( r \) — Monthly interest rate (decimal)
• \( M \) — Regular monthly payment ($)
• \( E \) — Extra payment toward principal ($)
• \( P \) — Initial principal amount ($)

Explanation: Each month's balance grows by interest, then decreases by the sum of regular and extra payments until paid off.

3. Benefits of Extra Mortgage Payments

Details: Extra payments reduce principal faster, decreasing total interest paid and shortening the loan term significantly.

4. Using the Calculator

Tips: Enter loan amount, interest rate, term, and any planned extra payment. All values must be ≥ 0 (extra payment can be 0).

5. Frequently Asked Questions (FAQ)

Q1: How do extra payments save money?
A: They reduce principal faster, so less interest accrues over time.

Q2: Is it better to pay extra monthly or lump sums?
A: Monthly extra payments have greater impact, but any extra helps. Earlier payments save more.

Q3: How much can I save with extra payments?
A: Even $100/month extra can save thousands and cut years off a 30-year mortgage.

Q4: Should I refinance or make extra payments?
A: Compare savings - sometimes extra payments on existing loan beats refinancing costs.

Q5: Are there prepayment penalties?
A: Most modern loans don't have them, but check your mortgage terms.