1. What is a Mortgage Loan Calculator With Extra Payments?

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

Purpose: It helps homeowners understand the impact of making additional payments toward their mortgage principal.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( B_k \) — Balance after month k ($)
• \( B_{k-1} \) — Previous balance ($)
• \( r \) — Monthly interest rate (decimal)
• \( M \) — Regular monthly payment ($)
• \( E \) — Extra payment ($)

Explanation: Each month, interest is calculated on the remaining balance, then the combined regular and extra payment reduces the principal.

3. Importance of Extra Payment Calculations

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.

5. Frequently Asked Questions (FAQ)

Q1: How much can I save with extra payments?
A: Savings depend on your loan terms and extra payment amount. Even $100 extra per month can save years of payments.

Q2: Should I pay extra toward principal or refinance?
A: This depends on current rates and your goals. Extra payments provide guaranteed returns equal to your interest rate.

Q3: When is the best time to make extra payments?
A: Earlier in the loan term has the greatest impact, as more of your payment goes toward interest initially.

Q4: Can I make lump sum payments instead?
A: Yes, lump sums reduce principal the same way. This calculator assumes regular extra payments.

Q5: Are there prepayment penalties?
A: Most modern loans don't have them, but check your loan documents to be sure.