Common questions
How do extra payments save interest?
Interest accrues each month on the remaining balance. Every extra dollar goes straight to principal, so the next month's interest (balance × rate ÷ 12) is charged on a smaller balance, and the effect compounds for the life of the loan. This calculator simulates it month by month rather than approximating.
Does paying extra lower my required payment?
No. With a standard fixed-rate mortgage the required monthly payment stays exactly the same; extra payments shorten the loan and cut total interest instead of reducing the bill. Recasting or refinancing are the tools that actually lower the required payment.
Monthly, annual, one-time, or biweekly: which extra payment is best?
Any extra to principal helps; the sooner and larger, the more it saves. A one-time lump early in the loan saves more than the same amount later because it has more months to work. Biweekly means paying half your monthly payment every two weeks: 26 half-payments equal 13 monthly payments a year, i.e. exactly one extra payment per year. The calculator models all four so you can compare them on the same loan.
How does biweekly work, and does it double-count with an annual extra?
Biweekly is 26 half-payments a year = 13 full monthly payments = one extra payment per year, modeled here as an even one-twelfth of a payment added to principal each month. It's a separate switch, so don't also enter a full extra payment as an annual extra expecting a different result; biweekly already is that one extra payment a year.
Is paying off the mortgage better than investing?
Prepaying is a guaranteed, risk-free return equal to your mortgage rate. If you itemize and deduct mortgage interest, the debt's true cost, and the guaranteed return from killing it, is rate × (1 − your marginal tax rate); if you take the standard deduction, prepaying earns the full rate. Investing has to beat that hurdle after tax to come out ahead, and its return is expected, not guaranteed. The invest-vs-prepay panel shows the break-even so you can decide honestly.
Do one-time lump sums work the same way?
Yes, balance drops and all future interest shrinks. Set the frequency to one-time and pick the month it lands; a lump early in the loan saves more than the same amount later. The month is load-bearing, so the calculator lets you place it exactly.
