Why early principal payments are so effective
Mortgage interest is calculated on the remaining balance. That means extra principal paid early in the loan has a compounding effect: it lowers the balance now, which lowers next month's interest, which lets more of each future payment go to principal.
This is why an extra $100 or $200 per month can shrink a 30-year mortgage by several years. The effect is strongest in the early and middle years of the loan when interest still dominates each payment.
What this calculator shows clearly
- Your regular principal-and-interest payment.
- Your accelerated payment after the extra amount is added.
- The new payoff timeline.
- The interest you avoid by paying faster.
Best use cases
Use this page when you are deciding whether to round up your mortgage payment, commit to a fixed monthly overpayment, or compare the guaranteed savings from debt reduction with alternative uses of that cash such as investing or rebuilding an emergency fund.