How do extra mortgage payments reduce my loan term?
Extra payments go directly to your principal balance, reducing the amount that accrues interest each month. Even small extra payments compound over time and can cut years off your mortgage.
How much does one extra mortgage payment per year save?
On a $300,000 30-year mortgage at 7%, one extra payment per year saves approximately $40,000 in interest and cuts 4–5 years off your term. Try it in the calculator above.
Is it better to make extra payments or invest?
It depends on your mortgage rate vs. expected investment returns. If your mortgage rate is 6%+ the guaranteed return of paying it off early often makes sense. Use our calculator to see the exact numbers.
What is an amortization schedule?
An amortization schedule shows every monthly payment broken down into principal and interest. Early in your mortgage, most of each payment is interest — extra payments accelerate the principal reduction.
Can I use this for different mortgage types?
Yes. Works for fixed-rate mortgages in any currency. Enter your current rate to simulate the impact of extra payments.
What is a mortgage overpayment calculator?
A mortgage overpayment calculator — also called a mortgage payoff calculator in the US — shows how making extra payments on top of your regular installment reduces your loan term and total interest. It's the same tool, just different regional terms for the same strategy.
How does a loan payoff calculator work?
Enter your loan amount, interest rate, and term. The calculator shows your full amortization schedule and lets you simulate how extra monthly payments cut your payoff date and total interest paid.
How much can I save by paying extra on my loan?
Most homeowners can save tens of thousands in interest by paying even $100–$200 extra per month. Run the simulation above to see your specific number.
Does this work for all loan types?
Yes. Works for mortgages, auto loans, student loans, personal loans, and any fixed-rate loan.
Is this calculator free?
Completely free. No signup required to use the calculator.
Can I save my results?
Create a free Wertly account to save your simulation, track your real loan balance month by month, and manage multiple loans.
What happens when I make extra payments on my loan?
Extra payments reduce your principal balance faster, which means you pay less interest over the life of the loan. The effect compounds — each extra payment saves more than it costs.
How much extra should I pay each month?
Even $50–$100 extra per month can save thousands over a 30-year loan. There's no minimum — any extra payment helps. Use the calculator to find the amount that makes sense for your budget.
Should I reduce the term or the installment with extra payments?
Reducing the term (paying off faster) saves more in total interest. Reducing the installment keeps your payments flexible. Try both strategies in the calculator to see which fits your goal.
Are there penalties for making extra mortgage payments?
Most modern mortgages allow extra payments without penalty, but some have prepayment penalties. Check your loan agreement.
Does paying extra affect my credit score?
Making extra principal payments doesn't directly affect your credit score, but paying down your loan faster reduces your debt-to-income ratio over time.