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Extra payment calculator

Paying a little extra each month reduces the balance faster and cuts the total interest.

By Promissory.ca Editorial Team Reviewed against official Canadian sources Last updated:

Any additional amount you can add each month.

Estimated interest saved

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How this calculator works

  1. Calculate the scheduled monthly payment for the balance, rate and term.
  2. Add your extra monthly amount to that payment.
  3. Amortise the balance at the higher payment until it reaches zero.
  4. Compare the total interest and the number of months against the original schedule.

Formula: Amortise the balance at the scheduled payment plus the extra amount until it reaches zero

Frequently asked questions

Does paying extra always save money?

Only if the loan allows prepayment without a penalty. Some fixed-rate loans and mortgages charge a prepayment penalty, which can exceed the interest saved. Check your agreement first.

Should I pay extra on my loan or invest the money?

That depends on the interest rate you are paying versus the after-tax return you expect. Clearing debt at a high rate is a guaranteed saving. This is general information, not financial advice.

What is a prepayment privilege?

Many mortgages allow you to pay a set percentage of the original balance each year without penalty. Using that privilege is often the cheapest way to pay down faster.

Sources

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