Question 1

How much do extra mortgage payments actually save?

Accepted Answer

It depends on the loan, but the effect compounds because every extra dollar stops accruing interest immediately. On a $320,000 loan at 6.5% over 30 years, an extra $300 a month cuts roughly 8-9 years off the loan and saves well over $100,000 in interest — enter your own numbers above to see your figure.

Question 2

Is it better to pay extra monthly or as one yearly payment?

Accepted Answer

Monthly extras save slightly more interest than a single yearly payment of the same total, because the balance comes down sooner in the year rather than later. The difference is usually modest — consistency matters far more than timing.

Question 3

Does paying extra reduce my monthly payment or the loan term?

Accepted Answer

On a standard fixed-rate mortgage, extra principal shortens the term — you finish paying it off sooner — and does not lower the required monthly payment. To lower the payment itself you would need to refinance or ask your lender to recast the loan, which is a separate process this calculator does not model.

Question 4

How is my monthly mortgage payment calculated?

Accepted Answer

The payment is the fixed amount that fully pays off the loan amount (price minus down payment) over the term at the given interest rate, split each month between interest on the remaining balance and principal. As the balance falls, more of each payment goes to principal.

Question 5

What's included in the payment shown here?

Accepted Answer

Principal and interest only. Many mortgage payments also include property taxes and homeowner's insurance (together called PITI) — this page isolates P&I so the effect of extra principal is easy to see on its own.

Question 6

How much does the interest rate change my payment?

Accepted Answer

A lot, and it compounds over 30 years — even a 0.5% difference in rate can move total interest by tens of thousands of dollars. The higher your rate, the more each dollar of extra principal is worth, because it is offsetting a bigger ongoing interest charge.

Question 7

Should I choose a 15-year or 30-year term?

Accepted Answer

A 30-year term gives lower required payments and more monthly flexibility; a 15-year term forces faster payoff and less total interest. Adding extra payments to a 30-year loan is a way to get close to the 15-year loan's total interest while keeping the 30-year loan's lower required payment as a floor.

Question 8

Can I use this for a rental or investment property?

Accepted Answer

Yes — the math is the same regardless of whether you occupy the property. This is for education only and is not financial, tax, or investment advice.

Question 9

What is amortization?

Accepted Answer

Amortization is the schedule that splits each fixed payment between interest and principal over the life of the loan. Early payments are interest-heavy because the balance is largest then; later payments are mostly principal as the balance shrinks.

Mortgage Payment Calculator with Extra Payments