Existing Mortgage Calculator Extra Payments

Mortgage Payment Formula:

\[ M = P \times \frac{r(1+r)^n}{(1+r)^n - 1} \]

Where:

M = Monthly payment
P = Principal loan amount
r = Monthly interest rate (annual rate divided by 12)
n = Number of payments (loan term in years multiplied by 12)

Current Loan Balance:

USD

Annual Interest Rate:

Remaining Loan Term:

years

Extra Monthly Payment:

USD

Original Monthly Payment:

Payment With Extra:

New Balance After Extra Payments:

Months Saved:

Interest Saved:

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1. What is the Mortgage Extra Payment Calculator?

This calculator shows how making extra payments toward your mortgage principal can save you money on interest and shorten your loan term. It compares your current mortgage with a scenario where you make additional monthly payments.

2. How Does the Calculator Work?

The calculator uses the standard mortgage payment formula:

\[ M = P \times \frac{r(1+r)^n}{(1+r)^n - 1} \]

Where:

$ M $ — Monthly payment
$ P $ — Principal loan amount
$ r $ — Monthly interest rate (annual rate divided by 12)
$ n $ — Number of payments (loan term in years multiplied by 12)

Extra Payment Calculation: The calculator then applies your extra payment directly to the principal and recalculates the amortization schedule to determine your savings.

3. Benefits of Extra Mortgage Payments

Details: Making extra payments can significantly reduce the total interest paid over the life of the loan and shorten the loan term. Even small additional amounts can lead to substantial savings.

4. Using the Calculator

Tips: Enter your current loan balance, interest rate, remaining term, and the extra amount you can pay each month. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How much can I save with extra payments?
A: Savings depend on your loan amount, interest rate, and how much extra you pay. Even $50-$100 extra per month can save thousands in interest.

Q2: Should I pay extra or invest the money?
A: This depends on your mortgage rate vs. expected investment returns. Paying off a high-interest mortgage often makes financial sense.

Q3: Are there penalties for extra payments?
A: Most US mortgages allow extra payments, but some loans have prepayment penalties. Check your loan terms.

Q4: Is it better to make one annual payment or monthly extras?
A: Monthly extra payments save slightly more because the principal is reduced sooner, but either method helps.

Q5: How do I ensure my extra payment goes to principal?
A: Contact your lender to confirm their process - some require specifying "principal only" payments.