What does this calculator do?
The tool first calculates a scheduled payment that would repay your entered balance over the remaining term. It then runs two month-by-month schedules: scheduled payments alone, and the same payment plus your extra principal. Both stop at the actual final payoff, including a smaller last payment. The difference in cumulative interest is the modeled saving.
How to use it
- Enter the current principal balance, fixed note rate, and remaining term.
- Choose a recurring extra amount that fits your budget. Check with the servicer that it will be applied to principal.
- Compare months and interest saved with the extra cash committed. Review fees, reserves, and other financial priorities separately.
The math, made clear
Monthly interest = outstanding balance × annual rate ÷ 12; new balance = old balance + interest − scheduled payment − extra principalA worked example
A $120,000 balance at 0% with ten years remaining has a $1,000 scheduled monthly payment. Adding $200 principal monthly repays it in 100 payments rather than 120: twenty months earlier, with no interest savings because the example rate is zero. At a positive rate, an earlier principal reduction can also reduce later interest.
What to keep in mind
Assumes a fully amortizing fixed-rate loan, monthly interest, no fees, no payment deferrals, and extra principal applied with every payment from next month. The calculated scheduled payment may differ from an actual statement with a nonstandard remaining term or rounding. Excludes taxes, insurance, PMI, recasting, refinancing, opportunity cost, and prepayment penalties. Check your contract and servicer instructions.
All default values are illustrative. Results are rounded for display; calculations use full precision except where a split must allocate exact cents. Read our methodology for shared definitions and report a calculation issue if a result looks wrong.