1. What is a Mortgage 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 impact of additional payments on their mortgage amortization.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( B_k \) — Current balance (USD)
• \( B_{k-1} \) — Previous balance (USD)
• \( r \) — Monthly interest rate (decimal)
• \( M \) — Regular monthly payment (USD)
• \( E \) — Extra payment amount (USD)

Explanation: Each month's balance is calculated by applying interest to the previous balance, then subtracting both the regular payment and any extra payment.

3. Importance of Extra Payments

Details: Even small extra payments can significantly reduce total interest paid and shorten the loan term, potentially saving thousands of dollars.

4. Using the Calculator

Tips: Enter your loan amount, interest rate, loan term, and any planned extra monthly payment. All values must be > 0 (except extra payment which can be 0).

5. Frequently Asked Questions (FAQ)

Q1: How do extra payments affect my mortgage?
A: Extra payments reduce principal faster, which decreases total interest paid and may shorten your loan term.

Q2: Should I make extra payments or invest?
A: This depends on your mortgage rate vs. expected investment returns. This calculator helps quantify the mortgage savings side.

Q3: Is it better to make monthly extra payments or lump sums?
A: Monthly extra payments typically save more interest due to compounding, but any extra helps.

Q4: Will my payment change if I make extra payments?
A: No, your regular payment stays the same, but more goes toward principal over time.

Q5: How accurate is this calculator?
A: It provides a good estimate, but consult your lender for exact figures as terms may vary.