Mortgage Overpayment Calculator
Every unit added to the payment goes straight to principal, so the term shortens. 200,000,000 over thirty years at 4.5% costs 1,013,371 a month. Add 200,000 to that and the term falls from 360 months to 257.2 — 102.8 months, about 8.6 years, gone. Interest drops from 164,813,423 to 112,057,568, saving 52,755,855, against 200,000 × 257.2 = 51,440,000 of extra principal put in.
Your numbers
Months saved
102.8mo
Interest saved
52,755,855
New term
257.2mo
Monthly payment
1,013,371
Formula
New term = −ln(1 − Principal × r ÷ (Monthly payment + Extra each month)) ÷ ln(1 + r), r = Annual rate ÷ 1200
This shortens the term; it does not cut the monthly payment. Recasting the loan with the same money to lower the payment gives a different answer. If an early-repayment penalty period is still running, take that off the interest saved, and on a variable rate the whole table is redrawn the moment the rate moves. Whether the money would do more elsewhere is outside this page — it looks only at loan interest.
What to enter
| Input | Default | Accepted range |
|---|---|---|
| PrincipalThe money you put in — the base that earns interest. | 200,000,000 | 0 and up |
| Annual rate (%)Interest quoted per year; the monthly rate is this over 12. | 4.5 | 0 ~ 30 |
| Years (yr)How many years the money stays put; compounding bites harder as this grows. | 30 | 1 ~ 50 |
| Extra each monthAdded on top of the payment; all of it goes to principal. | 200,000 | 0 and up |
Step by step
Quick reference table
Results when only Principal changes and everything else stays put.
| Principal | Months saved (mo) | Interest saved | New term (mo) |
|---|---|---|---|
| 100,000,000 | 157.9 | 39,596,698 | 202.1 |
| 150,000,000 | 124.4 | 47,466,064 | 235.6 |
| 200,000,000 | 102.8 | 52,755,855 | 257.2 |
| 300,000,000 | 76.4 | 59,437,190 | 283.6 |
| 400,000,000 | 60.8 | 63,491,471 | 299.2 |
What each result means
| Result | At default values |
|---|---|
| Months saved (mo)Months taken off the term by the extra payment. | 102.8 |
| Interest savedThe interest that never accrues because you paid early. | 52,755,855 |
| New term (mo)The term that actually remains once the extra is going in. | 257.2 |
| Monthly paymentWhat you owe every month. | 1,013,371 |
Common mistakes
This shortens the term; it does not cut the monthly payment. Recasting the loan with the same money to lower the payment gives a different answer. If an early-repayment penalty period is still running, take that off the interest saved, and on a variable rate the whole table is redrawn the moment the rate moves. Whether the money would do more elsewhere is outside this page — it looks only at loan interest.
Glossary
- Principal
- The money you put in — the base that earns interest.
- Annual rate
- Interest quoted per year; the monthly rate is this over 12.
- Years
- How many years the money stays put; compounding bites harder as this grows.
- Extra each month
- Added on top of the payment; all of it goes to principal.
- Months saved
- Months taken off the term by the extra payment.
- Interest saved
- The interest that never accrues because you paid early.
- New term
- The term that actually remains once the extra is going in.
- Monthly payment
- What you owe every month.
Frequently asked questions
Q. How is Mortgage Overpayment Calculator calculated?
New term = −ln(1 − Principal × r ÷ (Monthly payment + Extra each month)) ÷ ln(1 + r), r = Annual rate ÷ 1200 — Every unit added to the payment goes straight to principal, so the term shortens. 200,000,000 over thirty years at 4.5% costs 1,013,371 a month. Add 200,000 to that and the term falls from 360 months to 257.2 — 102.8 months, about 8.6 years, gone. Interest drops from 164,813,423 to 112,057,568, saving 52,755,855, against 200,000 × 257.2 = 51,440,000 of extra principal put in.
Q. Can you walk through an example?
With Principal 200,000,000, Annual rate 4.5%, Years 30yr, Extra each month 200,000, the answer is Months saved 102.8mo.
Q. What do I need to enter?
Enter Principal, Annual rate, Years, Extra each month. The result recalculates as you type, and an empty box counts as zero.
Q. How much does the answer move if I change a number?
Changing only Principal moves the answer to Principal 100,000,000 → Months saved (mo) 157.9 and Principal 400,000,000 → Months saved (mo) 60.8. The table below lays out five steps.
Q. How are the numbers rounded?
Money is shown to the nearest whole unit, percentages to one decimal place and everything else to two. What you see is rounded; the calculation itself carries the unrounded value forward.
Q. Anything to watch out for?
This shortens the term; it does not cut the monthly payment. Recasting the loan with the same money to lower the payment gives a different answer. If an early-repayment penalty period is still running, take that off the interest saved, and on a variable rate the whole table is redrawn the moment the rate moves. Whether the money would do more elsewhere is outside this page — it looks only at loan interest.
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