Should I pay extra or refinance?

If your rate is already low, extra principal often beats refinancing because it avoids closing costs. If your rate is materially higher than current rates, refinancing may help more — compare both.

Are biweekly payments the same as one extra payment a year?

Roughly. Twenty-six biweekly halves equal thirteen monthly payments, so you make about one extra payment per year of principal-and-interest. Mortgage Well doesn't simulate true biweekly servicing yet — approximate it with a monthly or annual extra.

Should I pay extra or invest instead?

Compare your mortgage rate to your expected after-tax investment return. If you have a low rate (say 3-4%) and a long horizon, investing the difference often wins on expected value. If your rate is higher, paying down the loan is a guaranteed risk-free return equal to your rate.

Will my servicer apply my extra to principal automatically?

Not always. Some servicers hold extras as future scheduled payments by default. Check your statement after the first extra and call the servicer if it isn't applied to principal — it should be.

Extra Payment Calculator

Find out how much sooner you can pay off your mortgage — and how much interest you can save — with extra monthly, annual, or one-time payments.

Extra Payment Plan

Generated … · Assumption set 2026-04-30

New payoff (with extras)

$2,022.62/mo

23 yr 5 mo

Time saved

6 yr 7 mo

Interest saved

$105,427.85

New payoff date

Nov 1, 2049

Total interest (with extras)

$302,712.79

Compared to no extras

Original total interest$408,140.64

Original payoff2056-06-01

Original number of payments360

Comparison chart

Show data table

Scenario	Monthly	Total interest
No extras	$2,022.62	$408,140.64
With extras	$2,022.62	$302,712.79

Assumptions used

Assumption set 2026-04-30

Loan amount: $320,000calculated
Annual interest rate: 6.50%user input
Loan term: 30 yearsuser input
Extra monthly payment: $200user input
One-time extra: $0 at month 12user input

How this calculator works

Extra principal payments shrink the balance you pay interest on every month afterward. Even small extras compound into years saved off the term and large reductions in lifetime interest. Three patterns are modeled: monthly extras (the same amount every month), annual extras (a tax-refund-style lump every year), and one-time lump sums.

Reviewed for calculation accuracy and clarity by the Mortgage Well Calculation Review Team · June 8, 2026

When to use this

You have spare monthly cash flow and want to know whether early payoff is worth it.
You received a windfall (bonus, tax refund) and want to see the impact of a one-time lump sum.
You're comparing extra principal against refinancing or recasting.

Methodology

We run two amortization schedules side by side: a baseline with no extras, and an accelerated version that applies your monthly and one-time extras as additional principal. The difference in total interest and number of payments is your savings.

interest_saved = baseline_total_interest - accelerated_total_interest
months_saved = baseline_months - accelerated_months

Assumptions

Extra principal is applied at the period scheduled (monthly extras start at month 1 unless otherwise constrained).
Interest rate, term, and scheduled payment do not change — only the principal balance.
We don't model prepayment penalties; check your loan documents for any.
We don't model tax effects of forgone mortgage interest deduction or alternative-investment returns.

Monthly extra payments

A constant monthly extra is the most predictable strategy. Every month you pay the scheduled payment plus a fixed extra that is applied to principal. The impact compounds: interest is charged on the smaller balance every subsequent month. On a typical 30-year loan, even $100–$200/month often shaves 3–6 years off the term and saves tens of thousands in interest. Set the monthly extra in the calculator and compare the "baseline" and "with extras" rows.

Annual extra payments

If your cash flow is lumpy — a year-end bonus, a tax refund, RSU vesting — an annual extra can be easier to commit to than a monthly add-on. The math is similar: each annual lump reduces the balance, and every subsequent month is charged interest on the lower number. The earlier in the loan you start, the bigger the lifetime impact.

Lump-sum (one-time) extra payments

A one-time lump applied to principal often produces a surprisingly large interest reduction, because the savings on every future month accrue against the lower balance. A lump sum is also the input to a recast — see the recast calculator if you want lower required payments instead of a faster payoff.

Biweekly payments — what they actually do

Biweekly mortgage plans split your monthly payment in half and collect every two weeks. Twenty-six biweekly halves equal thirteen monthly payments per year, so you make the equivalent of one extra monthly payment annually — all applied to principal. On a 30-year loan, that's typically 4–6 years off the term.

Important: Mortgage Well does not currently model true biweekly servicing schedules in this calculator. You can approximate the same effect by entering a monthly extra equal to (1/12) of your scheduled payment, or an annual extra equal to one full scheduled payment. See the biweekly guide for the trade-offs (including third-party biweekly programs that charge fees).

Interest-savings caveats

Pay extra only after building an emergency fund and capturing employer retirement matches.
Compare your mortgage rate to the after-tax expected return of alternative investments. If your rate is low, investing the difference may produce a better outcome.
Confirm there's no prepayment penalty on your loan. Most modern conventional loans don't charge one, but read your note.
Make sure extras are applied to principal, not held as a future scheduled payment. Servicer practices vary.

Worked example

On a $320,000 loan at 6.5% over 30 years, an extra $200/month can shorten the loan by about 5 years and save tens of thousands in interest. A single $20,000 lump sum at year 3 produces a similar effect to several years of $200/month — earlier dollars do the most work.

Frequently asked

Should I pay extra or refinance?: If your rate is already low, extra principal often beats refinancing because it avoids closing costs. If your rate is materially higher than current rates, refinancing may help more — compare both.
Are biweekly payments the same as one extra payment a year?: Roughly. Twenty-six biweekly halves equal thirteen monthly payments, so you make about one extra payment per year of principal-and-interest. Mortgage Well doesn't simulate true biweekly servicing yet — approximate it with a monthly or annual extra.
Should I pay extra or invest instead?: Compare your mortgage rate to your expected after-tax investment return. If you have a low rate (say 3-4%) and a long horizon, investing the difference often wins on expected value. If your rate is higher, paying down the loan is a guaranteed risk-free return equal to your rate.
Will my servicer apply my extra to principal automatically?: Not always. Some servicers hold extras as future scheduled payments by default. Check your statement after the first extra and call the servicer if it isn't applied to principal — it should be.

Sources and references

Helpful consumer references used to explain assumptions on this page. These are educational pointers, not regulatory endorsement.

CFPB — paying down your mortgage — consumer guidance on extra payments and how to ensure they go to principal
Internal — standard amortization formula — every scenario uses the same fully-amortizing fixed-rate math

Estimates only. This calculator is not a loan offer, loan approval, official Loan Estimate, Closing Disclosure, tax advice, legal advice, or financial advice. Actual payments, rates, taxes, insurance, mortgage insurance, closing costs, and loan terms may vary. Contact a qualified lender, tax professional, or financial advisor for guidance.