Extra payment mortgage calculator
Last updated: August 2022
Use the extra payment calculator below to help determine how advantageous it is to pay a little extra each month toward your mortgage. The calculator uses inputs, like your loan amount, term, property taxes, interest rate and insurance to give you a detailed idea of how an additional payment might help you save. You can experiment with the "Extra Payments" tab to help pinpoint an amount you can comfortably pay on top of your mortgage.
Extra payment mortgage calculator
You can adjust each input to reflect what you're paying on your house. Or, if you're in the process of buying a house, you can make adjustments to find a sweet spot for a home on which extra payments might benefit you.
- The loan type is whether this is a new loan or an existing loan for a house you already own.
- The purchase price is the amount you and your seller agree you'll pay for the house. This isn't the same as the loan amount, which typically is at most 80% of the total cost, plus interest.
- The down payment is what you pay toward the loan to cover the purchase price.
- A term, or loan term, is how long it'll take to pay off the loan, typically between 10 or 30 years.
- The interest rate is a percentage of the loan amount that you pay monthly.
- Extra payments are the additional monthly payments you plan to make each month to help save on your mortgage.
- Property tax is charged by local governments to cover public services and property.
- Homeowners insurance is required by most lenders. It protects your house, standalone structures, personal belongings and you and your family members' liability.
- Private mortgage insurance (PMI) is typically required by lenders if your down payment is less than 20%. This helps assure that you take on enough risk in case you miss a payment.
What the extra payment mortgage calculator tells you
Once you enter your inputs, the calculator will show you a comparison of how much extra payments might save you versus no extra payments.
It'll give you a break down of how much you might save on interest, the loan itself, PMI, home insurance and property tax. It even shows you if it'll shave down the number of months it'll take to pay the loan off.
Additionally, you can adjust the extra payment input to see how much raising or lowering it could save you in the long run.
When to make additional payments on your mortgage
There are many potential upsides when it comes to paying extra on your mortgage each month, according to Bankrate. It could help lower your interest rate and pay off your mortgage sooner, for instance. But, depending on your financial picture, there are potential drawbacks to consider.
For one, some lenders simply won't allow you to make extra payments. Do so and you may be penalized, so reach out to your lender first.
Secondly, paying extra on your mortgage means you can't get that extra money back if an unforeseen financial obligation crops up.
Before paying extra on your mortgage, make sure other debts are in a good place, advises Forbes. If, say, your credit card, student loan or other debts have a higher interest rate than your mortgage, you might be better off putting extra on them instead.
If you're still debating whether it's a good idea to pay extra, try the Allstate extra payment mortgage calculator. Find a sweet spot for extra payments and get a gauge of how much that extra payment may help you save on your mortgage in the long run. Other ways you can save on your mortgage include shopping around for lower homeowners insurance rates or even refinancing your mortgage.