Loan repayment calculator

How to use this calculator

Read the full guide: When refinancing makes sense

How it works

Enter current loan balance, interest rate, remaining term (or payment), and optional extra monthly or one-time principal payments. The tool recalculates payoff timeline, total interest, and charts balance over time with and without extras. An amortization table shows early payments applying mostly to interest.

Worked example

Example: $285,000 balance at 7.0%, 27 years remaining, payment about $1,920/month. Adding $200/month extra principal might cut payoff by several years and save tens of thousands in interest in this illustration. A one-time $5,000 lump sum reduces balance immediately and shortens the schedule further.

Why early extra payments do so much more

Amortization front-loads interest. On the $285,000 example at 7 percent, the first monthly payment of about $1,920 sends roughly $1,660 to interest and only $260 to principal. That ratio is not a trick, it is just what happens when interest is charged on a large balance.

Every extra dollar of principal you pay removes that dollar from the balance permanently, which means you never pay interest on it again. A dollar paid in year one avoids 27 years of compounding. The same dollar paid in year twenty avoids seven. This is the entire reason extra payments feel disproportionately powerful early and almost pointless at the end.

It also explains why the chart on this page bends rather than sloping. Each extra payment shortens the tail of the loan, and the tail is where the remaining interest lives.

Extra payments shorten the term, they do not lower the bill

This is the detail that surprises people most. If you send an extra $200 a month, your required payment next month is still about $1,920. The loan ends sooner, but the monthly obligation does not change, because the payment was fixed when the note was written.

That matters for cash flow planning. Voluntary extra payments are reversible: if your income drops, you simply stop making them and fall back to the required payment. Choosing a 15-year loan instead locks in the higher payment permanently. For most households the 30-year loan with voluntary extras is the safer version of the same strategy, even though it usually carries a slightly higher rate.

If you do want the required payment to drop after a large paydown, ask your servicer about recasting. For a modest fee, some lenders recalculate the payment over the remaining term using the new lower balance. It is not a refinance, your rate does not change, and this calculator does not model it.

Making sure the money lands where you intend

Servicers do not all handle extra money the same way. Some apply it to principal automatically. Others park it as a prepayment toward your next scheduled payment, or hold it in suspense, neither of which reduces interest the way you expect.

Send extra principal as a separate transaction clearly designated as principal only, or use the dedicated field in your servicer's portal if one exists. Then check the following statement and confirm the balance dropped by the full amount. It is worth verifying once rather than assuming for five years.

Biweekly plans deserve the same scrutiny. Paying half your payment every two weeks produces 26 half-payments, which equals 13 full payments a year rather than 12. That works, and the effect is roughly one extra payment annually. But third-party biweekly services often charge for it, and you can get exactly the same result for free by dividing one payment by twelve and adding that to each month.

Prepay, invest, or neither

Paying down a 7 percent mortgage is a guaranteed 7 percent return, which is genuinely attractive and completely risk-free. Equity markets have historically returned more on average, but not reliably and not on your schedule. The honest comparison depends on your rate, your tax situation, and how much volatility you can tolerate.

A few things usually come first regardless. Clear any debt at a higher rate than your mortgage, since credit card interest in the teens or twenties dwarfs any mortgage benefit. Capture an employer retirement match, which is an immediate return no mortgage can match. And fund an emergency reserve, because home equity is not liquid and you cannot withdraw a prepayment when the furnace fails.

Also check whether a paydown unlocks something. If mortgage insurance is still on your loan, reaching 80 percent loan-to-value can let you drop it, which adds to the return. And if current market rates are well below your note rate, compare prepaying against refinancing in the refinance workspace and read when refinancing makes sense before committing cash.

What this calculator does not include

• Assumes fixed rate and on-time payments.
• Does not model escrow, PMI removal, or ARM adjustments.
• Lender may apply extras differently (next payment due vs immediate principal).
• Prepayment penalties are not modeled (uncommon but check your note).
• Does not compare refinance closing costs; use for extra payment strategy on current loan.

Frequently asked questions

Should I pay extra principal or invest?

Depends on rate, tax situation, and risk tolerance. This tool shows mortgage interest saved, not investment returns.

Do extra payments reduce the monthly bill?

Usually they shorten the term unless you recast or modify the loan. Payment amount often stays the same until payoff.

What is recasting?

Some lenders recalculate payment after a large principal paydown for a fee. This tool does not model recast.

Is biweekly payment the same as extra monthly?

Biweekly schedules can equal one extra payment per year. Enter equivalent extra amount here for comparison.

Can I see refinance break-even here?

Use this for prepay math on your current loan. Compare rate offers on the offer comparison or refinancing guide.

Educational tool only. Not a Loan Estimate, appraisal, tax advice, or legal opinion. Numbers are illustrative unless you enter your own verified inputs.