Loan Calculator w/Extra Payments
|Do this calculation FIRST|
-as if you're NOT making extra payments.
- Paying down the principal on your loan more quickly will not reduce the minimum monthly payment or allow you to skip a payment until the loan is paid in full.
- Most loans (mortgage and other) in the United States compound interest monthly.
- Mortgage loans in Canada compound interest semi-annually.
- 30 years=360 months
- 25 years=300 months
- 20 years=240 months
- 15 years=180 months
- 10 years=120 months
- 5 years= 60 months
- 3 years= 36 months
I've seen several loan calculators that include other fees (taxes, insurance, PMI, HOA, etc...) in the calculation. I have intentionally left them out because they are subject to change frequently and mess up the schedule. If necessary, adjust your payment accordingly.
- If you want to calculate how much a mortgage payment will be on a $200,000 mortgage at 4.25% interest for 360 months, you would enter:
Now, let's say you would like to make extra monthly principal payments of $116.12 (to round the payment to $1100) for the next 10 years starting in July of 2019. You'll enter:
- 200000 (or 200,000) for Loan Amount
- 360 for Months
- 4.25 for Interest Rate (Compounded Monthly)
- Press the Payment button, and you'll see that your payment would be $983.88. You will pay about $154,196.69 in interest over the life of this loan. If you're viewing an amortization schedule, make sure that the month and year of your first payment is reflected in the first payment due field (in this example -June 2019).
- Monthly for how often extra principal payments will be made.
- 116.12 for the extra payment amount
- Select July 2019 as the beginning extra payment date
- Select July 2029 as the ending date. (June will actually be the last extra payment.)
- Press the View Amortization Schedule button, and you'll see that your mortgage will be paid in 322 months (instead of 360 months) and you'll pay about $130,404.14 interest (instead of $154,196.69).
- In this next example, let's say you took out a 30 year (360 months), $200,000 mortgage in May of 1996 (first payment due June 1996) at 7.5% interest. Your required payments are $1398.43. Because of the relatively high interest rate, you have been making monthly payments of $1500 (which you intend to continue) with the excess going to principal.
- 200,000 for the Loan Amount
- Leave the Months field blank
- 7.5 for Interest Rate (Compounded Monthly)
- 1500 for Payment
- Select June 1996 for when the first payment was due.
- Press the Months button, and you'll see that you'll pay $1500 for 287.58 months before your mortgage will be paid in full. You'll pay about $231,365.95 in interest over the life of this loan.
In Jan of 2014 you received an inheritance of $25,000 and decided to apply it to your mortgage principal.
When will the mortgage be paid in full?
- Select One Time Only
- 25000 extra payment
- Select Jan 2014 for when you'll make the extra payment
- Leave the ending date as is. Just make sure the year is later than the extra payment year. It will not affect the calculation.
- Now, press the View Amortization Schedule button. You'll see that your mortgage will be paid in just 263 months (instead of 288 months) and you'll pay just $219,223.55 interest (instead of $231,365.95). You'll make your final mortgage payment in April of 2018!
So with the extra monthly payments of $101.57 and a one-time-only payment of $25,000 you'll save about $84,000 and 8 years of monthly payments! - YIPPEE!!!
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