You can estimate the effect of extra payments by comparing your regular mortgage schedule with a scenario in which you make additional principal payments. The extra amount can be added monthly, annually, or according to another strategy. Because additional principal reduces the outstanding balance sooner, it can also reduce the amount of future interest charged. The exact effect depends on your remaining balance, interest rate, remaining term, and how much extra you pay. An amortization-based calculator can show the difference in your projected payoff date and total interest. Our mortgage calculator with extra payments can help you test different additional-payment amounts. Before making extra payments, also check your mortgage terms for any applicable restrictions or fees and make sure additional payments are actually being applied toward principal as intended.
