How this calculator works
The calculator builds two schedules on the same loan, rate, and term: a baseline with your normal repayment, and one with your extra repayment added each month and applied straight to principal. It then compares the total interest and the payoff time. Every extra dollar reduces the balance that interest is charged on, which is why a small regular amount compounds into a large saving over the life of the loan.
Interest saved = baseline total interest − total interest with extra repayments
On a floating rate you can repay as much extra as you like. On a fixed rate, banks allow only so much extra each year before a break fee applies, so the calculator flags when your planned amount goes over the allowance you set.
Worked example
Take a $500,000 loan at 6.5% over 30 years. Adding a few hundred dollars a month on top of the normal repayment clears the loan several years early and saves a substantial sum in interest, because the extra comes straight off the principal from day one. On a floating rate there is no cap. On a fixed rate, keep the yearly total under the allowance, around 5% of the loan at many banks, or the saving can be offset by a break fee.
What changes your saving
- How much extra — the larger the regular extra, the more interest and time you save.
- How early you start — extra repayments in the early years save far more than the same amount later.
- Your interest rate — the higher the rate, the more each extra dollar is worth.
- Fixed vs floating — floating is unlimited; a fixed rate caps penalty-free extra repayments each year.
A note on accuracy
This calculator computes both schedules on full, unrounded figures and rounds only for display. It applies the extra repayment monthly and does not model a one-off lump sum separately, and the fixed-rate allowance is an editable estimate since banks set and measure it differently. For general guidance, see Sorted, and our methodology for the formulas and sources.