Additional Payments Mortgage Calculator

Having lived in several states, owning primary residences and investment properties, Josh Patoka uses his experience using mortgages and HELOCs to help first-time home buyers and home owners find the best home loan for their financial goals. His work.

Having lived in several states, owning primary residences and investment properties, Josh Patoka uses his experience using mortgages and HELOCs to help first-time home buyers and home owners find the best home loan for their financial goals. His work.

Having lived in several states, owning primary residences and investment properties, Josh Patoka uses his experience using mortgages and HELOCs to help first-time home buyers and home owners find the best home loan for their financial goals. His work.

Having lived in several states, owning primary residences and investment properties, Josh Patoka uses his experience using mortgages and HELOCs to help first-time home buyers and home owners find the best home loan for their financial goals. His work.

Chris Jennings is a writer and editor with more than seven years of experience in the personal finance and mortgage space. He enjoys simplifying complex mortgage topics for first-time homebuyers and homeowners alike. His work has been featured in a n.

Chris Jennings is a writer and editor with more than seven years of experience in the personal finance and mortgage space. He enjoys simplifying complex mortgage topics for first-time homebuyers and homeowners alike. His work has been featured in a n.

Chris Jennings is a writer and editor with more than seven years of experience in the personal finance and mortgage space. He enjoys simplifying complex mortgage topics for first-time homebuyers and homeowners alike. His work has been featured in a n.

Chris Jennings is a writer and editor with more than seven years of experience in the personal finance and mortgage space. He enjoys simplifying complex mortgage topics for first-time homebuyers and homeowners alike. His work has been featured in a n.

| Loans & Mortgages Editor

Published: Aug 17, 2023, 5:00am

Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.

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Making extra mortgage payments on a one-time or recurring basis can help you pay off your mortgage sooner and save you a small fortune in total interest costs. This additional payments mortgage calculator makes it easier to estimate your potential savings and payoff date.

How To Use the Additional Payment Calculator

Below is a detailed summary of how to enter the appropriate loan information for a new or existing mortgage:

• Loan type. Choose “purchase” if you plan on buying a home and making extra payments immediately. Choose “refinance” if you’re getting a mortgage refinance or keeping your current loan.
• Purchase price. If you have a purchase loan, input the price you paid for the home.
• Down payment. With a purchase loan, input your down payment amount as a percentage. This calculator won’t factor in private mortgage insurance or similar premiums.
• Current loan balance. If you’re refinancing or already making repayments, list the outstanding mortgage principal that needs to be repaid.
• Monthly interest and principal payments. If you’re refinancing or already making repayments, include your minimum monthly mortgage payment, excluding taxes and insurance.
• Term. Enter the number of years of your purchase loan. The most common mortgage terms are 15 years and 30 years.
• Interest rate. List your current mortgage interest rate. This is different from your annual percentage rate (APR), which includes additional loan expenses, like mortgage insurance and discount points.
• Extra payment type. Decide between making monthly contributions or a single lump sum payment. You can increase your extra payment amount or frequency as your finances improve.
• Additional payment. Decide how much your extra payment amount will be. This is the amount you’ll apply to your loan principal. Be sure to check with your lender to verify there are no prepayment penalties.

Additional Payment Options

There are multiple repayment strategies for owning your home outright sooner. The best option depends on how much extra you’re willing to put toward the loan and how quickly you want to pay off your home loan. Any additional payments you make are more effective when they’re applied earlier in the repayment term when your monthly interest charges are higher.

Biweekly Mortgage Payments

A single monthly payment for the life of the loan is the default repayment frequency for most borrowers. Biweekly mortgage payments are budget-friendly and make the equivalent of an extra monthly payment each year without significantly increasing your out-of-pocket costs.

Instead of making a full monthly payment, you make half payments every two weeks. In some months, you’ll only pay the equivalent of a full monthly payment but make an extra half payment during longer months. This totals out to 26 half payments per year—or 13 monthly payments—versus 12 monthly payments using the default repayment schedule.

For example, if you choose to make biweekly payments of $500 instead of the standard $1,000 monthly payment, you’ll end up paying $13,000 every 12 months instead of $12,000.

Some mortgage servicers prohibit biweekly payments, and some charge fees to adjust your payment agreement. If you find yourself in this situation, consider setting aside the appropriate funds in your banking account and continuing the standard monthly payment. This way you can pay extra every month or make a larger payment every year to get the same benefits.

Extra Mortgage Payments

Setting up extra recurring payments on a regular cycle can help you pay off your mortgage early. Here are a few monthly repayment strategies you can try:

• Fixed payments. Contributing an additional fixed amount every month—or at any interval you can comfortably afford—can help you get out of debt sooner. Consider starting small with $50 or $100. You can always increase or decrease the amount later to match your budget.
• $1 per month. Increasing your extra payment amount by $1 each month, meaning $1,000 in the first month, $1,001 in month two, $1,002 in month three and so on can be an affordable strategy for tackling your mortgage. This tactic can also challenge you to consistently reduce your non-mortgage expenses.
• One-twelfth of your monthly payment. With this strategy, you’ll make an extra monthly payment over a year by dividing your principal and interest payment by 12. For example, with a monthly obligation of $1,500, you’ll contribute an extra $125 each month, which is 1/12 of your standard payment.
• Round up your monthly payment. Consider rounding up your payment amount to the next $100. For instance, instead of making a $1,062 monthly payment, you can contribute $1,100. You may decide to round up by several hundred dollars if you have sufficient disposable income.

Lump Sum Payment

A single payment is suitable when you have limited funds or are saving up your discretionary income for other financial priorities. One option is to contribute a cash windfall, such as your tax refund or annual work bonus.

You may also request a mortgage recast from your existing lender. By doing this, you’ll make a lump sum principal payment and have the lender recalculate your monthly payment over the same loan term. Depending on your payment size, this can significantly reduce your monthly payments.

Mortgage recasting can also be more affordable and efficient than a mortgage refinance as you’ll keep your current interest rate and term and pay fewer fees.

Mortgage Refinance

Refinancing your mortgage can help if you qualify for a lower mortgage rate. By refinancing, you could walk away with a lower monthly payment. If so, you can continue paying the original monthly amount and the difference will count as an extra principal payment.

For example, let’s say your current mortgage has a $1,500 monthly payment but refinancing reduces it to $1,300. Continue making the $1,500 payment as you’ve already established this habit and you can effortlessly contribute an extra $200 monthly.

This strategy isn’t as common as it was several years ago since refinance rates have increased substantially over the last year and a half. But you could still save money if your existing loan has ongoing fees or a high interest rate.

For instance, you may want to convert a government-backed mortgage, such as an FHA or USDA loan, into a conventional loan to remove the annual mortgage insurance premiums. Another option is switching from an adjustable-rate mortgage (ARM) to a fixed interest rate to stabilize your payments.

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