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Interest Savings with Extra Payments Tool

Want to pay off your mortgage faster and save thousands in interest? The Interest Savings with Extra Payments Tool helps you see how even small additional payments toward your loan can dramatically reduce interest costs and shorten your loan term.




Interest Savings with Extra Payments

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What is Interest Savings with Extra Payments Tool

The Interest Savings with Extra Payments Tool is a mortgage planning calculator that shows how much money you can save on interest—and how much faster you can pay off your home loan—by making extra payments toward your principal. Whether you add a little each month, make an annual lump sum, or schedule recurring extra payments, this tool gives you a detailed forecast of the financial impact.

It’s ideal for homeowners who want to reduce total interest paid over the life of their loan, pay off their mortgage early, or build equity faster. It provides a powerful visual of how a small change in your payment strategy can lead to major savings.




How it works

Interest Savings with Extra Payments Tool

To use the tool, you’ll enter your original loan amount, interest rate, term (e.g., 30 years), and regular monthly payment. Then, add the extra payment details—such as a fixed amount added to each monthly payment, one-time lump sums, or recurring annual or quarterly payments.

The tool recalculates your amortization schedule and shows how the extra payments reduce your remaining loan term and interest charges. For example, if you add just ₹5,000 monthly to a ₹50 lakh loan at 7% interest, you could pay off your loan 5–7 years early and save lakhs in interest. It helps you decide what kind of prepayment strategy works best for your income and goals, whether you prefer small consistent additions or occasional larger payments.



Frequently Asked Questions

Do extra payments always go toward principal Toggle
Yes, as long as you specify that the payment is for principal reduction. Many lenders apply extra funds toward interest or future payments unless instructed otherwise.
How often can I make extra payments Toggle
You can make them monthly, quarterly, annually, or as lump sums. This tool allows you to simulate various frequencies and amounts.
Will making extra payments shorten my loan term Toggle
Yes. Extra payments directly reduce the principal, which shortens the loan duration and lowers total interest over time.
Can I use this tool for fixed and adjustable-rate mortgages Toggle
Yes. While it’s most accurate for fixed-rate mortgages, you can still estimate savings for ARMs based on your current rate and balance.
Is there any penalty for making extra mortgage payments Toggle
Some loans have prepayment penalties, especially in the first few years. Always check with your lender before starting an aggressive prepayment strategy.