Extra Payment Calculator

What this does

How the math works

interest = balance × rate per payment
principal = regular payment − interest
new balance = balance − principal − extra

Check my math: a worked example

These numbers come straight from the calculator using its example inputs — if the math ever changes, this example changes with it.

Mistakes I see a lot

• Not telling the lender the extra is for principal. Some servicers hold an overpayment as "paid ahead" instead of reducing the balance — check the next statement.
• Entering the full monthly bill as the regular payment. Escrow (taxes, insurance, PMI) isn't principal or interest — use the P&I amount.
• Comparing the interest saved to nothing. The real comparison is what that money would've earned somewhere else (or what high-interest debt it could have paid off first).
• Forgetting prepayment penalties. Rare on mortgages now, more common on business and auto loans — read the note.
• Expecting the payment to go down. It doesn't; the loan just ends sooner.

Questions people ask

Is it better to pay extra every month or one big payment a year?

Earlier is always a little better, because the balance shrinks sooner. $100 a month and $1,200 in December are close, but the monthly version saves slightly more interest since each dollar starts working earlier.

Does paying every two weeks do the same thing?

Paying half your monthly payment every two weeks adds up to 26 half-payments — 13 full payments a year instead of 12. That extra payment is what saves the interest. You can model it here as a once-a-year extra equal to one monthly payment.

What does "time saved" count?

Calendar months between the original payoff date and the new one. The "fewer payments" number under it counts payments.

Can I add a payment that's dated between two scheduled payments?

Yes. It's applied with the next scheduled payment (the first one on or after its date). In real life a lender might apply it the day it arrives, which saves a few days of interest more than this shows.

Does the spreadsheet recalculate if I change things?

Yes. Every yellow cell on the Inputs sheet — including the one-time payment table — feeds both schedules, the year-by-year comparison, and the summary.

Assumptions and limits

• Fixed rate, end-of-period payments, and the same rounding as the Loan Amortization calculator: the payment and each period's interest are rounded to the cent.
• Every extra dollar goes straight to principal on the payment it's made with. (Tell your lender that's what it's for — some will otherwise hold it as an early payment.)
• The recurring extra starts with the first payment on or after your start date. The once-a-year extra is paid with that same payment and then every 12 months after it.
• A one-time payment rides along with the first scheduled payment on or after its date. It doesn't earn you any interest between its date and that payment.
• Extra payments never overpay the loan — the last payment is only what's left.
• The regular payment stays the same; extra principal shortens the loan instead of lowering the payment (that's a recast — there's a calculator for it).
• No prepayment penalties, fees, escrow, or rate changes.
• "Time saved" counts calendar months between the original and new payoff dates.