How it works
Ready to see the savings in action? Here's how to calculate your mortgage with extra payments:
- Enter your loan amount, loan term, interest rate and loan start date into the calculator.
- Head to the “Pay Off Loan Faster” section.
- Plug in different payment strategies and see how much you could save by:
- Adding a set amount to your monthly payments
- Making a one-time lump sum payment
- Paying extra once a year
The calculator will show how much you could save on interest and how much sooner you could be mortgage-free.
What counts as an additional payment?
An additional mortgage payment is exactly what it sounds like—any amount you contribute beyond your regular bill. Fortunately, extra principal payments can be made in lots of different ways, like:
- A one-time lump sum from a bonus or tax refund
- A mid-month mini payment
- Regular contributions added to each monthly payment
Just be sure your lender applies the extra funds to your principal, not toward future payments. Remember, to cut down your future interest costs, you need to pay down the principal.
Recurring vs. one-time contributions
Both recurring and one-time contributions are solid strategies—mix and match them however you like to pay off your mortgage ahead of schedule.
- Recurring payments, like rounding up the dollar amount or switching to biweekly payments, create steady progress.
- One-time payments from windfalls (e.g., a tax refund, bonus or inheritance) can make an immediate impact.
Using both methods can give you the most bang for your buck. Want to compare results? Test out extra payments on our mortgage calculator to see which strategy works best for your goals and budget.
Strategies to maximize savings
Use a three-pronged additional payment plan to help slash your interest and fast-track your mortgage payoff.
Biweekly payments
Switch from a monthly payment to a biweekly payment by splitting your bill in half and paying every two weeks. That results in one extra full payment each year—often applied directly to your principal balance. This can trim years off your mortgage.
Annual lump sums
Use bonuses, tax returns or other windfalls to make a one-time additional payment. You’ll lower your principal balance and reduce future interest without shaking up your monthly budget.
Round up monthly payments
Try rounding up your payment to beef up your monthly contributions. If your mortgage payment is $1,745, round up to $1,800 or $2,000. That small bump can lead to major savings over the life of your loan.
PRO TIP
When cleaning up your monthly budget and cutting out unnecessary costs (hello, streaming service you never use), you can redirect the amount you save toward extra mortgage payments. Remember, every extra payment helps you reach payoff day faster.
Next steps
You don’t have to overhaul your budget to make good progress. Even small changes—like rounding up or using a tax refund—can accelerate your payoff date without too much sweat off your back.
Talk to a Mortgage Specialist
No homeowner’s financial situation is cookie cutter. A mortgage specialist can help you decide whether to focus on interest savings, freeing up cash flow or paying off your loan sooner.
Check your lender’s prepayment policy
Some lenders apply extra payments to future installments, not the principal—and others charge prepayment penalties. Before you make additional payments, double check that they go toward the principal and won’t trigger any prepayment penalties.