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Free Home Loan Prepayment Calculator

See how extra payments on your home loan save you thousands in interest. Compare monthly prepayments and lump sum payments to find the best payoff strategy for your mortgage.

Prepayment Calculator

Interest Savings Summary
Current Total Interest (no prepayment)$0
New Total Interest (with prepayment)$0
Interest Saved$0
New Payoff Time0 years
Time Saved0 years

How to Use the Prepayment Calculator

This calculator shows you how making extra payments on your home loan can save thousands in interest. Start by entering your current loan balance, annual interest rate, and remaining term in years.

You have two prepayment options: a monthly prepayment (an extra amount you pay each month with your regular payment) and a lump sum prepayment (a one-time payment you make now). You can use either or both.

The results show a side-by-side comparison: the total interest you'll pay with no prepayment versus the interest with prepayments. You'll also see the total interest saved and how much faster you'll pay off your loan.

Even small extra payments make a big difference. For example, adding $100 per month to a $250,000 loan at 6.5% can save over $50,000 in interest and shave years off your mortgage.

Use our Mortgage Calculator to estimate your regular monthly payments first.

Prepayment Strategy Tips

  • Start early: Extra payments early in the loan term save more interest because more of your payment goes toward interest in the early years.
  • Bi-weekly payments: Making half your monthly payment every two weeks results in one extra full payment per year, significantly reducing your loan term.
  • Check for penalties: Some lenders charge prepayment penalties. Check your loan terms before making extra payments.
  • Emergency fund first: Make sure you have 3-6 months of expenses saved before putting extra cash toward your mortgage.

Frequently Asked Questions

Yes, prepaying reduces the principal faster so less interest accrues over time. However, consider whether your money might earn more in investments (like index funds) than the interest rate you're paying. If your mortgage rate is low (under 4%), investing may be better.
Early in the loan term is best because that's when the highest portion of your payment goes toward interest. Prepayments in the first 5-10 years of a 30-year loan have the most impact on total interest savings.
Compare your mortgage rate to expected investment returns. If your rate is 6-7% or higher, prepaying is a risk-free return at that rate. If your rate is 3-4%, long-term investing in diversified index funds may outperform the savings. Consider a balanced approach — do both.

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