How to use this extra repayments calculator
This calculator starts from where your loan is today, not where it started, so you can use it at any point in your mortgage.
- Current loan balance: what you still owe, from your latest statement or banking app.
- Interest rate and remaining term: the years left on the loan, not its original length. The hint under the balance shows the scheduled repayment we calculate, so you can check it against your statement.
- Repayment frequency: monthly, fortnightly or weekly, to match how you pay.
- Extra per repayment: the amount you would add on top of every repayment. Drag the slider to see how the saving grows.
- Open "More options" to add a one-off lump sum, such as a bonus or tax refund, and the year you would pay it.
The results compare two versions of your loan: the original schedule and the schedule with your extras. The chart shows both balances, and the table lists the year-by-year difference, which you can download as a CSV file.
If the scheduled repayment in the hint is lower than what you already pay each month, you are probably paying extra already. Enter the difference as your extra per repayment to see what that habit is saving you.
How extra repayments save interest
Interest is charged on the balance you owe each period. Your scheduled repayment covers that interest first, and the rest reduces the balance. An extra repayment skips the interest step entirely: every cent goes to principal, so the next period's interest is smaller, more of the next scheduled repayment goes to principal, and the effect snowballs.
Interest = B × r · New balance = B − (P − Interest) − E B = balance at the start of the period · r = annual rate ÷ repayments per year · P = scheduled repayment · E = extra repayment
The calculator repeats that step until the balance reaches zero. With a fixed total repayment, the number of repayments left is:
n = −ln(1 − B × r ÷ (P + E)) ÷ ln(1 + r) n = repayments remaining · ln = natural logarithm
Worked example
You owe $300,000 at 6.5% with 25 years left, repaid monthly. The scheduled repayment is $2,025.62, and if you change nothing you will pay $307,686 of interest over those 300 repayments.
Add $200 a month and the loan is cleared in 243 repayments instead of 300: 4 years and 9 months sooner. Total interest drops to $239,645, a saving of $68,042. Your extras add up to $48,400, so each dollar you prepay saves about $1.41.
Double the extra to $400 a month and the saving rises to $109,968, finishing 7 years and 10 months early. Keep the $200 a month and add a single $20,000 lump sum in year 3, and you save $108,331 and are debt-free 7 years sooner.
Why early extras are worth so much more
The same dollar saves far more interest early in a loan, because it avoids interest for longer. Here is the effect of a single $10,000 lump sum on the example loan, with no other extras, depending on when you pay it:
| Lump sum paid in | Interest saved | Time saved | Saved per $1 |
|---|---|---|---|
| Year 1 | $37,310 | 1 yr 11 mos | $3.73 |
| Year 5 | $27,018 | 1 yr 6 mos | $2.70 |
| Year 10 | $17,130 | 1 yr 1 mo | $1.71 |
| Year 20 | $4,433 | 7 mos | $0.44 |
The "saved per $1" figure is not a return on top of getting your money back. It is the total interest that dollar would otherwise have collected over the rest of the loan. The yearly return is simply your interest rate: prepaying a 6.5% loan is like earning a guaranteed 6.5% on that money, with no investment risk and, in most countries, no tax to pay on it.
Before you start paying extra
Extra repayments are one of the safest ways to build wealth, but get the order right:
- Keep an emergency fund. Money paid into a standard mortgage is hard to get back. An offset or redraw account (common in Australia) gives you the interest saving and keeps the cash accessible.
- Clear dearer debt first. A credit card at 20% beats any mortgage. The debt payoff planner helps you order your debts.
- Check for limits and fees. Fixed-rate loans often cap extra repayments or charge for going over the cap.
- Allow for tax. In the US, if you itemize and deduct mortgage interest, your after-tax saving is a little smaller than the figures shown.
- Make sure it goes to principal. Some lenders hold extra money as "prepaid" repayments unless you say otherwise. Ask for it to be applied to the principal.
Tip: the cheapest extra repayment is the one you never notice. When you get a pay rise, or after refinancing to a lower rate, keep paying the old amount. The difference becomes an automatic extra repayment.
The fortnightly trick and other ways to pay extra
Paying half your monthly repayment every fortnight adds up to 26 half-payments, or 13 full monthly repayments, a year. On the example loan, that works out at roughly an extra $168.80 a month, which saves about $59,673 and finishes 4 years and 2 months early. Enter 168.80 as the extra to see it for yourself, or compare frequencies from scratch in the mortgage calculator.
Rounding up works too: paying $2,100 instead of $2,025.62 is a $74 extra that most budgets barely notice. And the same maths applies to any amortizing debt, so you can use this tool for a car or personal loan as well, or try the loan calculator for a full schedule.
In the US, Canada and the UK the usual words are "prepayments" or "overpayments"; in Australia and New Zealand, "extra repayments". The effect is the same everywhere: less interest and a shorter loan.
Frequently asked questions
Is it better to pay a little extra every month or make one lump sum?
Will extra repayments lower my monthly repayment?
Should I pay off my mortgage early or invest?
Are there penalties for paying extra on a mortgage?
How are the payoff dates worked out?
Does choosing fortnightly or weekly change the answer?
This calculator gives estimates for education and planning. It is not financial advice, and your lender's figures may differ. See how we calculate.