Mortgage Calculator With Amortization 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

Annual Interest Rate:

Loan Term:

years

Extra Monthly Payment:

USD

Monthly Payment:

Total With Extra:

Total Interest:

Payments Saved:

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1. What is a Mortgage Calculator With Amortization Extra?

Definition: This calculator shows how making extra payments affects your mortgage amortization schedule, total interest paid, and loan term.

Purpose: It helps homeowners understand the impact of additional payments on their mortgage payoff timeline and interest savings.

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 payment is applied first to interest, then to principal. Extra payments reduce the principal faster, saving interest and shortening the loan term.

3. Importance of Extra Payments

Details: Even small extra payments can significantly reduce total interest and shorten your loan term. For example, $100 extra per month on a $300,000 loan at 4% can save over $28,000 in interest and pay off the loan 4 years early.

4. Using the Calculator

Tips: Enter your loan amount, interest rate, loan term, and any extra payment you plan to make. The calculator will show your amortization details and savings.

5. Frequently Asked Questions (FAQ)

Q1: How do extra payments affect my mortgage?
A: Extra payments reduce your principal balance faster, which means you pay less interest over the life of the loan and can pay off your mortgage sooner.

Q2: Should I make extra payments or invest?
A: This depends on your mortgage rate vs. expected investment returns. Generally, if your mortgage rate is higher than expected investment returns, paying extra makes sense.

Q3: How much can I save with extra payments?
A: Savings vary based on loan amount, rate, and extra payment amount. This calculator shows your specific savings.

Q4: Are there prepayment penalties?
A: Most modern mortgages don't have prepayment penalties, but check your loan documents to be sure.

Q5: Should I refinance instead?
A: If you can get a significantly lower rate, refinancing might make sense. This calculator can help compare options.