Starting from your current balance, the calculator amortizes forward month by month, applying your extra payment entirely to principal each period, until the balance reaches zero.
Every extra dollar of principal paid today eliminates all the interest that dollar would have accrued for the rest of the loan. This compounding effect is why even modest extra payments produce outsized interest savings.
What extra payments actually accomplish
On a $270,000 balance at 6.8% with 26 years remaining, an extra $200/month typically shaves 5-7 years off the payoff date and saves tens of thousands in interest — because you are removing principal that would otherwise accrue interest for every remaining month of the original term.
Before committing to extra payments
Confirm with your servicer that extra payments are applied to principal, not held as an advance payment toward next month's bill — some servicers require you to specify this explicitly. Also make sure you have an adequate emergency fund before directing extra cash to mortgage principal, since that money becomes illiquid once paid in.
How much faster will my mortgage pay off with extra payments?
It depends on your balance, rate and remaining term, but as a general pattern, an extra payment equal to roughly 10% of your regular payment often cuts 4-6 years off a 30-year mortgage.
Do extra payments always go to principal?
Not automatically at every servicer. Confirm with your lender that extra payments are applied to principal reduction, not held as a prepayment credit toward a future scheduled payment.
Is it better to pay extra monthly or make one lump sum payment?
Both reduce your balance and save interest identically for the amount paid. Monthly extra payments are easier to sustain consistently; a lump sum has more immediate impact if you have a windfall like a bonus or tax refund.
Should I pay off my mortgage early or invest the extra money?
This depends on your mortgage rate versus expected investment returns. At rates below 6%, many financial planners lean toward investing; above 7%, paying down the mortgage is a more competitive guaranteed return.
What is the fastest way to pay off a mortgage?
A combination of consistent extra principal payments, refinancing to a shorter term if the payment is affordable, and directing windfalls (bonuses, tax refunds) toward principal rather than spending them.