A 30-year mortgage at 6.9% costs roughly $424,802 in interest on a $400,000 loan — more than you borrowed. Extra payments are the one lever that reliably reduces it.
What this calculator shows you
Your monthly payment is the part you owe each month on principal and interest. The number that decides whether the deal is good is the one underneath it: how much of your payment goes to interest before it starts going to principal, and what the loan costs in total.
On a typical 30-year mortgage, the crossover — where more of your payment goes to principal than to interest — lands around year 18. Until then, most of each payment is buying the lender’s interest, not your equity. That is exactly why extra payments made directly to principal are so effective: they attack the balance earlier and shrink everything downstream.
How to use it
- Loan amount. This is what you actually borrow: the purchase price minus your down payment. If you are still shopping, enter the price and treat the loan amount as the number after a typical down payment.
- Interest rate. Use the rate from your Loan Estimate, not an advertised "starting rate." Rates are quoted as a percentage, so 6.9% means 6.9.
- Term. 30 years maximizes the payment but costs the most in total interest. 15 years is usually affordable if you can stretch — check what a 15-year payment would be before committing.
- Extra monthly payment. Enter what you could realistically add each month. There is a cash reserve worth having first; beyond that, a consistent extra payment is the single most effective thing you can do for this loan.
The formula
The monthly payment uses the standard amortization formula: M = P × [r(1 + r)ⁿ] / [(1 + r)ⁿ − 1], where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the number of monthly payments. The extra-payment figure is found by running the same schedule repeatedly until the balance reaches zero.
What this does not include
This calculator shows principal and interest only. A real payment is usually higher because most mortgages also carry:
- Property tax — set by the county, often reassessed periodically.
- Homeowners insurance — varies with the home’s replacement cost and your deductible.
- PMI — private mortgage insurance, required when the down payment is under 20%. See the PMI calculator for when it drops off.
- HOA dues — if the property is in a homeowners association.
Frequently asked questions
Does an extra payment shorten the loan or lower the payment?
It depends on who you ask. Extra payments made to your servicer and applied to principal shorten the loan — your monthly payment stays the same and you finish early. If you ask the servicer to recast the loan instead, they re-amortize it and lower your monthly payment while keeping the end date. Recasting is the better choice if your cash flow is tight; extra payments are better if you can afford them.
Is there a limit on extra mortgage payments?
Most servicers accept extra principal without penalty, but check your loan agreement first. Some loans carry a prepayment condition. Ask your servicer in writing where extra payments will be applied.
Should I pay extra or invest the money instead?
Paying extra on a mortgage at 6.9% is a guaranteed, tax-free return equal to the loan’s interest rate. Investing can earn more, but not reliably and not in the short term. Paying extra is usually the right first move, especially once you have a cash reserve and a full emergency fund.
How much extra payment should I make?
Any amount helps, and even $50 a month measurably shortens the term. The number that works is one you can keep up after a bad month, not the largest number that looks good on paper.