Mortgage Calculator With Additional Payment

Mortgage Payment Formula:

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

Loan Balance (USD):

USD

Interest Rate:

Loan Term:

years

Additional Payment (USD):

USD/month

Monthly Payment (USD):

Total With Extra (USD):

Months Saved:

Interest Saved (USD):

Unit Converter ▲

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1. What is a Mortgage Calculator With Additional Payment?

This calculator helps you understand how making extra payments toward your mortgage principal can save you money on interest and shorten your loan term. It shows the impact of regular additional payments on your amortization schedule.

2. How Does the Calculator Work?

The calculator uses the standard mortgage payment formula:

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

Where:

$ P $ — Principal loan amount
$ r $ — Monthly interest rate (annual rate ÷ 12)
$ n $ — Total number of payments (term in years × 12)

Explanation: The calculator then applies your additional payment directly to the principal each month and recalculates the remaining balance and interest accordingly.

3. Importance of Additional Payments

Details: Even small additional payments can significantly reduce the total interest paid and shorten the loan term. For example, an extra $100/month on a $300,000 loan at 4% can save over $25,000 in interest and pay off the loan 4 years early.

4. Using the Calculator

Tips: Enter your current loan balance, interest rate, and remaining term. Then add any additional monthly payment you plan to make. The calculator will show your new payment schedule and savings.

5. Frequently Asked Questions (FAQ)

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

Q2: Should I pay extra each month or make a lump sum payment?
A: Regular additional payments have a greater impact than occasional lump sums because they reduce the principal consistently.

Q3: Are there prepayment penalties?
A: Some mortgages have prepayment penalties - check your loan terms before making extra payments.

Q4: Is it better to pay extra or invest?
A: This depends on your mortgage rate vs. expected investment returns. Paying extra is a guaranteed return equal to your interest rate.

Q5: How much can I save with additional payments?
A: Savings depend on your loan amount, interest rate, term, and the amount of extra payment. This calculator helps quantify those savings.