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What paying extra actually buys

What does an extra payment really buy me?

An overpayment is the only lever on this site that is entirely yours to pull. This runs the same amortisation twice — as scheduled, and with your extra applied — and shows the two curves together.

The loan

The overpayment

Month 12 is one year in.

Interest saved—Against the same loan paid exactly to schedule
Time removed—
Paid off in—
Instead of—

Scheduled interest —, against— with the overpayment. Your total monthly outgoing to the loan becomes—.

Two balance curves: as scheduled, and with the extra

The schedule

What this page assumes, and where it comes from

Every field starts from a placeholder you can change. The interest rate is a round starting number, not a quote, not an average, and not tied to a date — this site publishes no rates. The tax, insurance and mortgage-insurance rates are typical orders of magnitude, not your county’s or your insurer’s.
Extra payments are applied to principal in the month you set, on top of the scheduled payment. The final payment is trimmed so the balance lands exactly on zero rather than overshooting.
The schedule is a level-payment amortisation: interest is the balance times the monthly rate, and everything else reduces principal. Extra payments are applied to principal in the month you set.
Conventional PMI is modelled as ending when the SCHEDULED balance reaches 80% of the original purchase price — the point the Homeowners Protection Act lets you request cancellation. Automatic termination is 78%. Both are measured against the original value, so appreciation does not count.
Every figure this calculator produces is an illustration. It uses the published rules for amortisation and mortgage insurance, and states its assumptions on the page, but it cannot know your credit profile, your county’s tax assessment or an insurer’s pricing. Treat the shape of the answer as useful and the exact dollar as a placeholder.

Questions this raises

Why does an extra hundred dollars save so much?

Because it goes entirely to principal, and every dollar of principal you remove early is a dollar you never pay interest on again — for the whole remaining term. The effect compounds backwards through the schedule, which is why the saving is many times the amount you actually paid.

Is a one-off payment better early or late?

Early, decisively. Move the month field and watch the saving fall. The same lump sum in year one and year fifteen buy very different amounts of interest.

Will my servicer apply it to principal?

Not automatically. Many will hold an unmarked overpayment as a prepaid future instalment instead, which does nothing for you. Tell them in writing to apply it to principal, and check the next statement.

Is overpaying always the right call?

No. It is a guaranteed return equal to your mortgage rate, which is excellent against a 7% loan and poor against a 3% one when the money could be in a matched retirement account or paying off a card at 22%. It is also illiquid: you cannot get it back without borrowing against the house again.

Ask a person about this

A real lender would want these five things before it could say anything useful.

This form is a demonstration. Submitting it validates your entries and shows you the confirmation state. Nothing is saved, nothing is sent, and nobody will call you. See the README for the single seam where real delivery would be wired in.

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