Extra payments calculator: paying down principal early
Paying more than the scheduled amount, and having it applied to principal, shortens the loan and cuts the total interest. Enter your loan and any mix of extra payments to see by how much. Every box starts blank.
Enter your loan and the extra payments
Want to see where each payment goes? Use the amortization calculator.
Paying extra shortens the loan; it doesn’t lower the payment
On a fixed-rate loan, extra principal generally doesn’t change the required monthly payment. The same payment keeps going until the smaller balance is paid off, so the loan simply ends sooner. Each later payment also carries less interest and more principal, because interest is charged on a smaller balance.
Recasting
A recast (also called re-amortization) is when the servicer recalculates the payment on the lower balance over the time left on the loan, which lowers the required payment. Whether a recast is offered, how much you must pay down first, and any fee depend on your servicer and your loan documents. Your servicer can tell you what it offers.
How your servicer must handle payments
Federal rules set some requirements for crediting payments on a loan secured by your principal dwelling. Here is what they say, and what they don’t.
- Full periodic payments: a servicer must credit a periodic payment (enough to cover principal, interest, and escrow, if any, for a billing cycle) as of the date it is received, unless a delay causes no charge to you and no negative credit reporting.Source: 12 CFR 1026.36(c)(1) and (c)(3) (Regulation Z: crediting periodic payments, partial payments, and payoff statements) · checked Nov 10, 2026
- Partial payments: a servicer can hold a payment that is less than a full periodic payment in a suspense or unapplied funds account. If it does, the periodic statement must show the total held, and once enough builds up to cover a periodic payment, it must be credited as one.Source: 12 CFR 1026.36(c)(1) and (c)(3) (Regulation Z: crediting periodic payments, partial payments, and payoff statements) · checked Nov 10, 2026
- Payments made a different way than the servicer asks: if the servicer has written payment instructions and accepts a payment that doesn’t follow them, it must credit it within five days of receipt.Source: 12 CFR 1026.36(c)(1) and (c)(3) (Regulation Z: crediting periodic payments, partial payments, and payoff statements) · checked Nov 10, 2026
- Extra amounts: these crediting rules are about periodic and partial payments. They don’t spell out how an amount above the scheduled payment is applied; that follows the terms of your loan and applicable law. Under Regulation X, a servicer’s failure to apply an accepted payment to principal, interest, escrow, or other charges under the terms of the loan and applicable law is a covered error.Source: 12 CFR 1024.35(a)–(e) (Regulation X: error resolution) · checked Nov 10, 2026
- Payoff statement: on a written request, the servicer generally must send an accurate payoff statement within seven business days.Source: 12 CFR 1026.36(c)(1) and (c)(3) (Regulation Z: crediting periodic payments, partial payments, and payoff statements) · checked Nov 10, 2026
If an extra payment wasn’t applied the way your loan terms say
- Send a written notice of error with your name, information that identifies your loan account, and the error you believe happened. If the servicer has given you a specific address for notices of error, use it. A note on a payment coupon doesn’t have to be treated as a notice of error.Source: 12 CFR 1024.35(a)–(e) (Regulation X: error resolution) · checked Nov 10, 2026
- The servicer must acknowledge it in writing within 5 days and, for this kind of error, correct it or explain why it found no error within 30 days, not counting weekends and legal public holidays. It can extend that by 15 days if it tells you in writing first.Source: 12 CFR 1024.35(a)–(e) (Regulation X: error resolution) · checked Nov 10, 2026
- To ask how payments were applied, you can send a written request for information. The servicer must acknowledge it within 5 days and generally respond within 30 days (both not counting weekends and legal public holidays).Source: 12 CFR 1024.36(a)–(d) (Regulation X: requests for information) · checked Nov 10, 2026
Prepayment penalties
A prepayment penalty is a charge for paying off all or part of the principal early. Your Loan Estimate states whether the loan has one, on the line labeled “Prepayment Penalty.”Source: 12 CFR 1026.37(b)(4) (Regulation Z: “Prepayment Penalty” on the Loan Estimate) · checked Nov 10, 2026
| Loan | Rule | Source |
|---|---|---|
| Most closed-end mortgages (Regulation Z) | A penalty is allowed only if other law permits it and the loan has an annual percentage rate that can’t increase after consummation, is a qualified mortgage, and isn’t a higher-priced mortgage loan. It can’t apply after the first 3 years and can’t exceed 2% of the loan balance prepaid in the first 2 years or 1% in the third year. A creditor that offers a loan with a penalty must also offer an alternative without one. | Source: 12 CFR 1026.43(g) (Regulation Z: limits on prepayment penalties) · checked Nov 10, 2026 |
| FHA | The mortgage must let you prepay in whole or in part at any time and in any amount, and can’t charge for the prepayment. | Source: 24 CFR 203.22(b) (FHA: prepayment privilege) · checked Nov 10, 2026 |
| VA | You can prepay at any time without a premium or fee, all of it or any part of at least one installment or $100, whichever is less. A payoff in full is credited when received. A partial prepayment that doesn’t arrive on an installment due date doesn’t have to be credited until the next due date or 30 days after receipt, whichever comes first. | Source: 38 CFR 36.4311 (VA: prepayment) · checked Nov 10, 2026 |
| USDA | Guaranteed loans that require prepayment penalties are ineligible. | Source: 7 CFR 3555.104(b) (USDA guaranteed loan terms: ineligible terms) · checked Nov 10, 2026 |
For a conventional loan, check the Loan Estimate, the Closing Disclosure, and your note, and ask your lender or servicer.
How the calculator works
- The scheduled payment and each month’s interest are figured the same way as in the amortization calculator.
- Extra amounts are applied to principal right after that month’s scheduled payment. An extra amount is never more than the balance left.
- “Paid off sooner” compares the month of the last payment with and without the extra payments. “Interest saved” is the difference in total interest.
What this leaves out: taxes, what the money could have earned elsewhere, escrow and mortgage insurance, and fees. It assumes the servicer applies each extra amount to principal in the month shown. It is education, not advice on whether to pay extra.
Guidelines change; confirm with a licensed lender.