See how extra monthly payments can shorten a mortgage and reduce interest.
UNDERSTAND THE ANSWER
How is this calculated?
The regular principal-and-interest payment is calculated from the remaining balance and term. The extra amount is added to every payment and applied to principal.
Accelerated payoff formulaNew term = −ln(1 − rP ÷ Payment) ÷ ln(1 + r)
A practical example
Adding $250 each month to a $280,000 mortgage can remove years from the payoff schedule and save substantial interest.
Calculation assumptions
The current rate remains fixed.
The extra amount is paid every month and applied to principal.