When to use this calculator
Compare mortgage payoff time and interest with and without a fixed extra monthly principal payment. Assumes fixed monthly interest, month-end payments and extras applied directly to principal. Excludes fees, taxes, insurance, early repayment charges and lender overpayment limits. Final payments are capped to the amount owed.
Explore the mortgage & property calculators for other questions in this topic. For a related calculation, use the Mortgage Payment Calculator: Estimate principal-and-interest payments on a fixed-rate mortgage.
Check how the lender applies an extra payment
The model assumes each extra payment reduces principal immediately after that month’s interest is charged. A lender may handle extras differently or impose annual limits and charges. If an extra amount is held as a future instalment instead of reducing principal, these modelled savings may not apply.
PUTTING IT INTO PRACTICE
Mortgage Overpayment: a worked example
The values below are an illustrative example, not a recommendation. Replace them with measurements or assumptions that match your question.
| Input | Example value |
|---|---|
| Outstanding principal | 1,200 |
| Fixed annual interest rate (%) | 0 |
| Remaining months (integer) | 12 |
| Extra monthly payment | 100 |
| Result | Regular monthly payment: 100 With overpayment: 200 Original payoff: 12 months New payoff: 6 months Time saved: 6 months Interest saved: 0 |
- Check the input labels and enter the example values above.
- Apply the relationship: Monthly interest = balance × annual rate/1200; subtract the regular payment and extra principal until paid off..
- The result is Regular monthly payment: 100 With overpayment: 200 Original payoff: 12 months New payoff: 6 months Time saved: 6 months Interest saved: 0 , rounded for display.
How to interpret your result
Assumes fixed monthly interest, month-end payments and extras applied directly to principal. Excludes fees, taxes, insurance, early repayment charges and lender overpayment limits. Final payments are capped to the amount owed.
Separate property price, deposit and financed amount. Gross rental yield excludes operating expenses, whereas net yield depends on the costs you include. Equity is an estimated asset value rather than immediately available cash.
Frequently asked questions
Are early repayment charges deducted from the saving?
No. The displayed saving is interest only. Subtract any relevant charges and confirm the lender’s contract before deciding whether to overpay.
Are rental yield and property return the same?
No. Yield measures rental income relative to a property value or cost. Total return can also include changes in value and transaction costs.
When is the mortgage overpayment calculator useful?
Compare mortgage payoff time and interest with and without a fixed extra monthly principal payment. Assumes fixed monthly interest, month-end payments and extras applied directly to principal. Excludes fees, taxes, insurance, early repayment charges and lender overpayment limits. Final payments are capped to the amount owed.
How do I use the mortgage overpayment calculator?
Enter outstanding principal, fixed annual interest rate (%), remaining months (integer), extra monthly payment. The result updates automatically. Use the units shown beside each input; the example values illustrate the method.
Which formula does this calculator use?
Monthly interest = balance × annual rate/1200; subtract the regular payment and extra principal until paid off..
What should I check before using the result?
Assumes fixed monthly interest, month-end payments and extras applied directly to principal. Excludes fees, taxes, insurance, early repayment charges and lender overpayment limits. Final payments are capped to the amount owed.
How are results rounded?
Scalar numbers display up to six decimal places, with scientific notation for very large or small values. Text, fraction, date and schedule outputs use the format described on the tool. Intermediate calculations use JavaScript floating-point arithmetic. Keep sensible precision for your measurements.
Further reading
For background on this topic, see CFPB: paying extra principal ↗. This is a topic reference, not an external review or endorsement of this tool.
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