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Extra Mortgage Payment Calculator

Interest and Years Saved With a Monthly Overpayment, a Lump Sum or Both

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How the Extra Mortgage Payment Calculator works

This extra mortgage payment calculator compares your normal repayment schedule with one where you pay more. Enter the balance, rate and years left, then a regular monthly overpayment, a lump sum, or both, to see the interest saved, the new payoff date and how much sooner the loan is cleared.

Extra mortgage payment calculator formula

The standard payment comes from the amortization formula, Payment = balance × r ÷ (1 − (1 + r)^−n). The extra mortgage payment calculator then runs the loan month by month:

New balance = balance × (1 + r) − (payment + extra)

Every extra pound or dollar goes straight to principal, so the next month's interest is lower and more of the fixed payment goes to principal too. A lump sum is taken off the balance before the first month.

Worked example: 200 a month extra

300,000 at 6% over 30 years has a payment of 1,798.65. Adding 200 a month clears the loan in 23 years 3 months, 6 years 9 months sooner, and saves 91,173.43 of interest.

Worked example: a 10,000 lump sum

Pay 10,000 off the same mortgage at the start and change nothing else. The loan finishes in 27 years 5 months, 2 years 7 months early, and the interest saved is 45,823.56. The earlier in the term you overpay, the more it saves.

Extra mortgage payment reference table

A 300,000 mortgage at 6% over 30 years with extra monthly payments from 50 to 1,000.

Extra a month Paid off in Time saved Interest saved
50.00 27 years 11 months 2 years 1 month 29,211.35
100.00 26 years 1 month 3 years 11 months 53,346.41
150.00 24 years 7 months 5 years 5 months 73,707.61
200.00 23 years 3 months 6 years 9 months 91,173.43
250.00 22 years 1 month 7 years 11 months 106,356.67
300.00 21 years 0 months 9 years 0 months 119,700.76
350.00 20 years 1 month 9 years 11 months 131,540.26
400.00 19 years 2 months 10 years 10 months 142,126.98
450.00 18 years 5 months 11 years 7 months 151,658.70
500.00 17 years 8 months 12 years 4 months 160,294.97
550.00 17 years 1 month 12 years 11 months 168,158.63
600.00 16 years 5 months 13 years 7 months 175,354.09
650.00 15 years 11 months 14 years 1 month 181,966.54
700.00 15 years 4 months 14 years 8 months 188,066.15
750.00 14 years 11 months 15 years 1 month 193,712.75
800.00 14 years 5 months 15 years 7 months 198,954.80
850.00 14 years 0 months 16 years 0 months 203,837.89
900.00 13 years 7 months 16 years 5 months 208,398.23
950.00 13 years 3 months 16 years 9 months 212,667.32
1,000.00 12 years 10 months 17 years 2 months 216,673.46

Quick answers

FAQ

Is it better to overpay monthly or pay a lump sum?

For the same total money, paying sooner saves more interest, so a lump sum now beats spreading it over later months. In practice a regular monthly extra is easier to sustain, and many people do both when a bonus arrives.

Will overpaying reduce my monthly payment?

Not usually. Most lenders keep the payment the same and shorten the term, which is what this calculator models. Some let you ask for the payment to be recalculated instead, which lowers it but saves less interest overall.

Are there penalties for overpaying?

Some fixed-rate mortgages cap overpayments, often at around 10% of the balance a year, and charge an early repayment fee above that. Check your mortgage offer or ask your lender before making a large extra payment.

Should I overpay or invest instead?

Overpaying earns a guaranteed return equal to your mortgage rate. Investing may earn more but carries risk. Many people keep an emergency fund first, then compare the mortgage rate with realistic after-fee investment returns.

See also: all Debt tools, Pay, Bills, Property, Investing, Saving.

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