1. What is a Mortgage Calculator With Extra Payments?

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

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

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 monthly payment (USD)

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

3. Importance of Extra Payments

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

4. Using the Calculator

Tips: Enter your loan amount, interest rate, loan term, and any extra monthly payment you plan to make. 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: They reduce principal faster, decreasing total interest and shortening the loan term.

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

Q3: Are there prepayment penalties?
A: Some loans have them - check your mortgage terms before making extra payments.

Q4: Is it better to make biweekly payments or monthly with extra?
A: Mathematically similar if the total annual payment is the same, but biweekly may be easier to budget.

Q5: How much can I save with extra payments?
A: The calculator shows your exact savings based on your specific loan details and extra payment amount.