Every extra dollar early removes future interest.
Punch in your loan, then add what you can: an extra hundred a month, a tax refund once a year, or a switch to bi-weekly. The calculator shows your new payoff date, total interest paid, and how much you saved versus the original schedule.
Yearly snapshot
Year-end balance, interest paid that year, and principal knocked down — under your accelerated plan.Estimates only. Monthly compounding at the rate you enter; assumes the rate holds steady (ARMs change), payments arrive on schedule, and your servicer applies extra principal on receipt (most do — verify on your statement). Property taxes, homeowners insurance, PMI, and HOA aren't modeled — only principal and interest. Bi-weekly is approximated as one extra monthly payment per year, which matches the long-term effect of true bi-weekly schedules. Use this as a planning tool, not a promise.
Early payments are almost all interest.
A 30-year mortgage looks like a flat monthly payment, but inside that payment the split between interest and principal is wildly uneven. In year one, most of every payment is interest. In year thirty, almost all of it is principal. That's why an extra dollar in year one shaves far more off the total than an extra dollar in year twenty.
- The interest charge each month is your remaining balance × (rate ÷ 12). On a $300k loan at 6.5%, that's $1,625 of interest in month one — most of your payment.
- Extra principal jumps the line. Any dollar above the scheduled payment goes straight to principal — it doesn't accrue interest next month, and it doesn't accrue interest for the next 29 years either.
- Lump sums hit hardest early. $5,000 applied in year one saves more than $5,000 applied in year ten, because that money would have been compounding interest the whole time.
Your mortgage isn't really a "monthly payment" — it's a balance that accrues interest 12 times a year, with a payment chipping at it. The faster you knock the balance down, the less interest the balance can generate. That's all there is to it.
One free extra payment per year.
A "bi-weekly" mortgage isn't twice a month — it's every two weeks. There are 52 weeks in a year, so 26 half-payments works out to 13 monthly payments per year instead of 12. The extra full payment goes to principal and quietly cuts years off a 30-year loan.
- You don't need a special program. Most servicers don't actually accept bi-weekly schedules — they just hold half-payments and apply them monthly. The same effect is yours by paying ⅟₁₂ extra each month, or one full extra payment once a year. Free, no signup required.
- Watch out for "bi-weekly enrollment fees." Some companies charge $300+ to set up bi-weekly billing. Don't pay it — replicate the schedule yourself.
The order-of-operations still applies.
Paying down a 6–7% mortgage feels great, but it shouldn't jump the line ahead of the basics. In the money order of operations, extra mortgage principal sits late — after the match, the emergency fund, the high-interest debt, and the tax-advantaged accounts that beat your mortgage rate.
- Capture the 401(k) match first. A 50–100% one-time return outpaces any mortgage rate. Don't divert match money to the house.
- Pay off credit cards and personal loans first. A 22% credit card costs more than a 7% mortgage, by a lot.
- Compare against a Roth IRA. Long-run market returns are typically higher than mortgage rates. The mortgage payoff is a guaranteed return at your rate; investing is a probable, larger return. Both are defensible — most people do some of each.
- Don't drain your emergency fund. Mortgage prepayment is the opposite of liquid — once it's in the house, you can't get it back without selling or refinancing.
Where this estimate is rough.
- Principal & interest only. Property taxes, homeowners insurance, PMI, and HOA dues aren't modeled. Your actual escrow payment is bigger than what's shown here.
- Adjustable-rate loans drift. If you have an ARM, the rate (and payment) will change at reset dates. Re-run with the new rate when it adjusts.
- Confirm extras hit principal. Most servicers apply extra payments to principal automatically, but a few default to "advance the next payment." Check your statement after the first extra to make sure the principal balance dropped.
- Refinancing changes the math. A new loan resets the amortization schedule. Lower rate ≠ less interest if you also reset to 30 years and pull cash out.
- Recasting vs. prepayment. A lump sum prepays the loan but doesn't reduce your monthly payment — it shortens the term. "Recasting" (some lenders charge ~$250) re-amortizes around the lower balance and lowers the monthly payment instead. Both work; know which one you're doing.