Formula
The scheduled payment stays the same. Extra principal is applied every month:
Months saved = original term − term with the extra payment
Interest saved is the original total interest minus the shorter schedule's interest.
Assumptions
- The extra amount is paid every month.
- The lender accepts extra principal without a penalty.
Worked example
A $250,000 balance at 7% with 25 years left and $300 extra each month saves 7 years 5 months.
Input definitions
- Balance
- What you still owe.
- Extra monthly principal
- Money added on top of the required payment. Zero is allowed.
Limitations
This is an estimate, not a loan offer, tax filing, or investment advice. The currency control changes the symbol only.
Questions
What if the extra payment is zero?
The time saved is zero and the original term stays in place.
Where is the interest I save?
It is the Interest saved row. The extra-payment page leads with that dollar amount.