💡 Why calculate extra mortgage payments?
Over the life of a 30-year mortgage, the total interest paid can be staggering. Because traditional amortization schedules apply most of your early payments toward interest, adding even a small extra amount to your monthly payment goes directly toward paying down your principal balance. This creates a powerful compounding effect, potentially saving you tens of thousands of dollars.
📐 How the early payoff algorithm works
This tool uses a precise step-by-step amortization schedule iteration. First, it calculates your standard monthly payment using the formula $$M = P \frac{r(1+r)^n}{(1+r)^n - 1}$$. Then, it simulates paying the loan down month by month using the standard payment plus your extra contribution. Because the principal shrinks faster, less interest is accumulated each subsequent month. We track this until the balance hits zero to find exactly how much time and money you save.