{
  "slug": "extra-payment-impact",
  "title": "Extra Mortgage Payment Impact Calculator",
  "heading": "Extra Payment Impact Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/extra-payment-impact",
  "summary": "See the years and interest an extra monthly amount removes from a loan.",
  "description": "Every dollar paid above the scheduled amount goes straight to principal, and because interest accrues on the remaining balance, that dollar keeps saving for the entire remaining term. This calculator amortises the loan twice — once on schedule, once with your extra payment — and reports the months removed and interest avoided. The effect is strongly non-linear: on a high-rate loan early in its life, a modest extra payment can remove years, while the same amount in the final stretch barely moves the date because most of the payment is already principal.",
  "formula": "Simulate month by month: interest = balance × rate ÷ 12; balance = balance + interest − (scheduled payment + extra). Compare months and cumulative interest against the unaccelerated schedule.",
  "dateModified": "2026-08-25",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=extra-payment-impact",
  "inputs": [
    {
      "id": "balance",
      "label": "Current balance",
      "kind": "number",
      "hint": null,
      "default": 285000,
      "unit": "$",
      "min": 1000,
      "max": null
    },
    {
      "id": "rate",
      "label": "Interest rate",
      "kind": "number",
      "hint": null,
      "default": 6.25,
      "unit": "%",
      "min": 0.1,
      "max": null
    },
    {
      "id": "yearsLeft",
      "label": "Years remaining",
      "kind": "number",
      "hint": null,
      "default": 26,
      "unit": "years",
      "min": 1,
      "max": null
    },
    {
      "id": "extra",
      "label": "Extra payment per month",
      "kind": "number",
      "hint": null,
      "default": 250,
      "unit": "$/mo",
      "min": 0,
      "max": null
    },
    {
      "id": "lump",
      "label": "One-off lump sum today",
      "kind": "number",
      "hint": null,
      "default": 0,
      "unit": "$",
      "min": 0,
      "max": null
    }
  ],
  "outputs": [
    {
      "id": "interestSaved",
      "label": "Interest saved",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "monthsSaved",
      "label": "Months removed from the term",
      "format": "number",
      "hint": null,
      "primary": false
    },
    {
      "id": "newTermMonths",
      "label": "New payoff length in months",
      "format": "number",
      "hint": null,
      "primary": false
    },
    {
      "id": "scheduled",
      "label": "Scheduled payment",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "baseInterest",
      "label": "Interest on the original schedule",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "newInterest",
      "label": "Interest with extra payments",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Current balance: 285000 $",
      "Interest rate: 6.25 %",
      "Years remaining: 26 years",
      "Extra payment per month: 250 $/mo",
      "One-off lump sum today: 0 $"
    ],
    "outputs": [
      "Interest saved: $81,298.91",
      "Months removed from the term: 75",
      "New payoff length in months: 237",
      "Scheduled payment: $1,850.25",
      "Interest on the original schedule: $292,278.20",
      "Interest with extra payments: $210,979.30"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter current balance ($).",
      "Enter interest rate (%).",
      "Enter years remaining (years).",
      "Enter extra payment per month ($/mo).",
      "Enter one-off lump sum today ($).",
      "Read your interest saved on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "balance": 170000,
        "rate": 6.25,
        "yearsLeft": 16,
        "extra": 150,
        "lump": 0
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "balance": 285000,
        "rate": 6.25,
        "yearsLeft": 26,
        "extra": 250,
        "lump": 0
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "balance": 455000,
        "rate": 6.25,
        "yearsLeft": 42,
        "extra": 400,
        "lump": 0
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "Is overpaying the mortgage better than investing?",
      "a": "Overpaying earns a guaranteed, tax-free return equal to your mortgage rate. Investing may beat it over long horizons but carries risk and, in taxable accounts, tax drag. A common split: overpay when the mortgage rate is above your realistic after-tax expected return, invest when it is comfortably below."
    },
    {
      "q": "Do I need to tell the lender it's principal-only?",
      "a": "Yes, in most cases. Unlabelled overpayments can be held as a prepaid future instalment rather than applied to principal, which produces none of the savings modelled here. Check that the statement's principal balance actually drops."
    },
    {
      "q": "Are there prepayment penalties?",
      "a": "Most standard mortgages in the US no longer carry them, but some non-qualified, investor, and older loans do, typically within the first three to five years. Read the note before committing to a schedule of overpayments."
    },
    {
      "q": "Biweekly payments or one extra payment a year?",
      "a": "Biweekly halves produce 26 half-payments — one extra full payment annually — plus slightly faster principal reduction from earlier crediting. The difference between the two approaches is small; the size of the extra amount matters far more than the cadence."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/refinance-breakeven-months",
    "https://www.revenuelab.fyi/toolbox/credit-card-payoff",
    "https://www.revenuelab.fyi/toolbox/rent-vs-buy"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Extra Mortgage Payment Impact Calculator (https://www.revenuelab.fyi/toolbox/extra-payment-impact)"
}