1. What is Extra Payment Savings?

Extra payment savings refer to the amount of interest you can save by making additional payments toward your mortgage principal. This reduces the total interest paid over the life of the loan and can significantly shorten the loan term.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• Total Interest — Interest paid over the entire loan term with regular payments
• New Interest — Interest paid when making extra payments
• Interest Saved — The difference between the two amounts

3. Importance of Extra Payments

Details: Making extra payments can save thousands in interest and reduce your loan term by years. Even small additional payments can have a significant impact over time.

4. Using the Calculator

Tips: Enter your current loan amount, interest rate, loan term, and the additional amount you plan to pay each month. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How much can I save with extra payments?
A: Savings depend on your loan amount, interest rate, and the amount of extra payment. Even $100 extra per month can save thousands over the loan term.

Q2: Should I pay extra principal or refinance?
A: This depends on your interest rate and how long you plan to stay in the home. Compare savings from extra payments versus refinancing costs.

Q3: Are there penalties for extra payments?
A: Most loans allow extra payments, but some may have prepayment penalties. Check your loan terms.

Q4: When is the best time to make extra payments?
A: Earlier in the loan term saves more interest since more of your payment goes toward interest at the beginning.

Q5: Can I stop extra payments if needed?
A: Yes, extra payments are voluntary. You can adjust or stop them at any time.