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On $300,000 at 6.5% over thirty years, $200 a month extra removes $103,448.79 of interest and 83 payments. It can also bring a mortgage insurance cancellation request forward by 43 months, which no calculator mentions. What it cannot do is tell you the payment your lender will quote, because that is four lines and this is the first one.
Last updated 8 October 2026
An educational estimate, not a loan offer and not financial, tax or legal advice. This page amortises one fixed-rate balance and adds a constant extra payment. It returns the principal-and-interest line only: no property taxes, no homeowner’s insurance, no mortgage insurance, no association dues, no fees, and no view on whether prepaying is a good use of the money. Every federal rule quoted below carries its citation; confirm your own figures with your servicer and your own loan documents.
Before you close on a house you are handed a Loan Estimate, and Regulation Z dictates how the payment on it is broken up. Under 12 CFR 1026.37(c)(2), a creditor must itemise each periodic payment on exactly four labelled lines:
The “Payment Calculation” table · 12 CFR 1026.37(c)(2)
The calculator above produces line one. The regulation is explicit that line four is arithmetic on the other three: the total periodic payment is “calculated as the sum of the amounts disclosed pursuant to paragraphs (c)(2)(i) through (iii)”. Below that table the form carries a fifth figure under the label “Taxes, Insurance & Assessments”, and 1026.37(c)(4)(ii) requires it “even if no escrow account for the payment of some or any of such charges will be established”. Declining escrow does not make the bills go away; it moves them off the mortgage statement and onto you.
What is in that fifth figure is defined elsewhere, at 12 CFR 1026.43(b)(8), and it is wider than most people assume. “Mortgage-related obligations” mean “property taxes; premiums and similar charges identified in § 1026.4(b)(5), (7), (8), and (10) that are required by the creditor; fees and special assessments imposed by a condominium, cooperative, or homeowners association; ground rent; and leasehold payments.” Homeowners association dues and ground rent are in that list. Neither is in the box above, and on a condominium the association fee can be the second largest line in the payment.
So a number worth holding on to: on $304,000 at 6.5% over thirty years, principal and interest is $1,921.49. Put a $4,800 annual property tax bill and an $1,800 annual insurance premium next to it and the escrow line is $550 a month, which makes the total $2,471.49 before a cent of mortgage insurance. The figure this page returns is 78% of the payment. The tax and insurance amounts there are placeholders for your own; what is sourced is the arithmetic that turns them into a monthly line.
The CFPB describes the mechanism in one sentence: an escrow account “is set up by your mortgage lender to pay certain property-related expenses”, and “the money that goes into the account comes from a portion of your monthly mortgage payment.” Regulation X then limits how large that portion may be. Under 12 CFR 1024.17(c)(1)(ii), throughout the life of the account a servicer may charge “a monthly sum equal to one-twelfth (1/12) of the total annual escrow payments which the servicer reasonably anticipates paying from the account” and “may add an amount to maintain a cushion no greater than one-sixth (1/6) of the estimated total annual payments from the account.”
$6,600 a year of taxes and insurance, under 1024.17(c)(1)(ii)
Two things follow that catch people out. The first is that the figure is a forecast of next year’s bills, so it moves. The CFPB puts the consequence plainly: “Your property taxes and insurance premiums can change from year to year. Your escrow payment—and with it, your total monthly payment will change accordingly.” A fixed-rate mortgage fixes one of the four lines above and none of the others, which is the whole answer to why a fixed payment went up. Regulation Z builds the warning into the form itself, requiring “a statement that the amount disclosed can increase over time” beside both the escrow line and the taxes and insurance estimate.
The second is the shortage mechanism. If an escrow analysis finds “a shortage or deficiency, the servicer may require the borrower to pay additional deposits to make up the shortage or eliminate the deficiency”. A reassessment or an insurance renewal can therefore raise the monthly line and add a catch-up on top of it in the same letter. None of that is in the calculator, and no calculator can know it in advance, because it depends on a tax assessment that has not happened.
Start with why prepaying works at all, which is the shape of an amortisation schedule rather than anything clever. Take the page’s own opening figures, $300,000 at 6.5% over thirty years:
$300,000 · 6.5% · 360 payments
Two hundred dollars is 10.5% of the scheduled payment, and it is 74% of the principal that payment was going to repay in month one. That is the whole mechanism. Early in a long loan almost everything you send is rent on the money, so a small addition is a large proportional increase in the only part of the payment that shortens the loan. The same $200 added in year twenty-five does far less, because by then the scheduled payment is already mostly principal.
The decision to send it, though, is a different problem from getting it applied. Where federal payment-crediting rules apply, which 12 CFR 1026.36(c)(1) limits to closed-end credit “secured by a consumer’s principal dwelling”, three provisions decide what happens to your money:
Which makes one habit worth adopting. Do not pay $2,096.20 as a single transaction and assume the servicer will read your mind about the $200. Send the extra separately, label it in writing as a principal reduction, and then verify it on the statement, because Regulation Z has already built you the verification. 12 CFR 1026.41(d)(3)(i) requires the periodic statement to show the total received since the last statement “including a breakdown showing the amount, if any, that was applied to principal, interest, escrow, fees and charges, and the amount, if any, sent to any suspense or unapplied funds account”. That final clause is the line to find. A figure sitting there means your prepayment is parked rather than applied, and the 83 months this page promises you have not started accruing.
One structural thing prepaying a fixed-rate mortgage does not do: it does not reduce next month’s required payment. The payment stays $1,896.20 and the term gets shorter. If what you need is a smaller required payment, that is a recast, a separate request with its own conditions and usually a fee, and nothing on this page models one.
If you put less than 20% down you are probably paying mortgage insurance, and the CFPB is blunt about who it is for: it “protects the lender – not you – in the event that you fall behind on your payments.” On a conventional loan there are three ways off it, and prepaying interacts with exactly one of them. That distinction is where almost every article on this subject goes wrong.
Getting out of conventional PMI · single-family principal residence, closed on or after 29 July 1999
The first test reads the balance you actually have. The CFPB: “You can ask to cancel PMI ahead of the scheduled date, if you have made additional payments that reduce the principal balance of your mortgage to 80 percent of the original value of your home.” The second reads the balance you were scheduled to have: your servicer “must automatically terminate PMI on the date when your principal balance is scheduled to reach 78 percent of the original value of your home.” Prepaying does not move that date. It moves the date you become entitled to ask.
Which turns the extra payment into two savings rather than one. Take a $320,000 purchase with 5% down, so a $304,000 loan at 95% loan-to-value, at 6.5% over thirty years:
$304,000 on a $320,000 home · 80% of original value is $256,000
Forty-three months of premiums, on top of the $103,000 of interest, and the calculator above cannot show it because it has no field for a purchase price or a premium. There are conditions on the request and they are worth reading in advance rather than at month 81: it must be in writing, you must have “a good payment history” and be current, you must certify there are no junior liens, and you may need an appraisal showing the value has not fallen below the original value. “Original value” itself has a definition that catches people: it “generally means either the contract sales price or the appraised value of your home at the time you purchased it, whichever is lower”, and on a refinance it is the appraised value at the refinance. A rising market does not lower the threshold.
The FHA case, where none of that applies. FHA annual mortgage insurance is not governed by the 80% and 78% tests, and on a small down payment it never comes off. HUD Mortgagee Letter 2023-05, effective for case numbers endorsed on or after 20 March 2023, sets the annual premium and its duration together: on a mortgage term of more than fifteen years, a loan-to-value of “≤ 90.00%” carries 50 basis points for “11 years”, while “> 90.00% but ≤ 95.00%” carries 50 basis points and “> 95.00%” carries 55 basis points, both for the “Mortgage term”. There is also an upfront premium of “175 Basis Points (bps) (1.75%) of the Base Loan Amount”. So the 3.5% minimum down payment buys mortgage insurance for thirty years, a 10% down payment buys it for eleven, and prepaying changes neither. The usual way out is a refinance into a conventional loan, which is a new loan at whatever rate exists then. The premium rates above are set by mortgagee letter and can be revised; the durations are the structural part.
This matters because the two figures are deliberately different and the difference runs the wrong way for this calculation. The APR is defined at 12 CFR 1026.22(a)(1) as “a measure of the cost of credit, expressed as a yearly rate, that relates the amount and timing of value received by the consumer to the amount and timing of payments made”, determined “in accordance with either the actuarial method or the United States Rule method”. It is a solved rate, derived from a payment schedule that already exists. Feeding it into a formula whose job is to produce a payment schedule inverts the calculation, and because the APR is built on a finance charge that includes points, loan fees and lender-protecting insurance, the answer comes out too high. On $300,000 over thirty years, a 6.5% note with a 6.78% APR has a payment of $1,896.20; entering 6.78 returns $1,951.78, which is $55.58 more and corresponds to no document in your file.
The Loan Estimate expects this confusion and heads it off in words the regulation specifies, at 12 CFR 1026.37(l)(2): the APR must appear with the statement “Your costs over the loan term expressed as a rate. This is not your interest rate.”
There is a sharper reason the APR cannot describe your payment, and it is one line of the finance-charge rule. 12 CFR 1026.4(c)(7)(v) excludes from the finance charge “Amounts required to be paid into escrow or trustee accounts if the amounts would not otherwise be included in the finance charge”. Escrow is outside the APR. So the APR is broader than the interest rate and still narrower than your monthly payment: the interest rate describes one line of four, the APR describes that line plus the loan’s costs, and nothing but the Total Monthly Payment describes what leaves your account. Mortgage insurance, by contrast, is inside the finance charge, under 1026.4(b)(5), as a premium “for any guarantee or insurance protecting the creditor against the consumer’s default or other credit loss”.
Your taxes and your insurance. It has no field for either. These are the two largest items outside principal and interest, they are set by a local assessor and an insurer rather than by your lender, and they are revised annually. Any page that claims to produce your monthly housing payment without asking for them is guessing.
Your mortgage insurance premium. Conventional PMI rates “vary by down payment amount and credit score”, so there is no figure to put here, and this page has no field for one. FHA premiums are published, but depend on the loan-to-value and the base loan amount, neither of which the calculator asks for.
Homeowners association dues, ground rent, special assessments. Named in 12 CFR 1026.43(b)(8) as part of what the form must disclose, absent here, and on a condominium frequently several hundred dollars a month.
Whole cents. The schedule is computed in fractions of a cent and clears exactly on the last payment. A servicer bills whole cents and charges whole cents of interest, which does not divide evenly: on $300,000 at 6.5%, the billed payment of $1,896.20 leaves a 361st payment of $4.74. Expect your real schedule to have a small stub at the end. Regulation Z anticipates this and permits the disclosure to ignore it, letting a creditor disregard “That payments must be collected in whole cents”, “That months have different numbers of days” and “The occurrence of leap year” (12 CFR 1026.17(c)(3)).
Anything that is not a fixed rate. One rate for the whole term. No adjustable period, no reset, no interest-only period, no balloon, no recast, no refinance.
What your servicer will do with the extra money. Modelled as an immediate principal reduction every month. Whether that happens is a matter of the rules above and your servicer’s written instructions, and the statement line at 1026.41(d)(3)(i) is the only proof.
Fees, closing costs or the money you would spend to get the loan. The balance field is a balance. Nothing above is deducted from it or added to it.
Whether prepaying is the right thing to do with the money. This page computes interest avoided. It knows nothing about the return you could get elsewhere, your emergency reserves, your other debts at higher rates, your tax position, or the fact that money put into a house is hard to get back out. It is not financial, tax or legal advice, and it does not recommend anything.
Boundary behaviour worth knowing: a blank or non-numeric balance, rate or term is refused, as is a negative rate or a negative extra payment, and a rate above 100% or a term under a month. There is one more, and it is a limit of the arithmetic rather than of your loan. Where the rate and the term are extreme enough that (1 + the monthly rate) raised to the number of months exceeds roughly 4.5 quadrillion, the scheduled payment and the first month’s interest come out exactly equal in the double-precision numbers this page works in, and it cannot follow the balance down. It says so instead of reporting a payoff date it reached by giving up. Measured on 8 October 2026: no rate up to the 100% this page accepts reaches that point over thirty years, it takes 94.90% over forty years, 75.12% over fifty, and 18.54% over two hundred, which is possible here only because the term field sets no upper bound. The loan the figures describe does amortise, in exactly the term you entered, with almost all of the principal repaid in the closing months.
Every regulation above was read at the eCFR on 1 October 2026 and quoted from the current text; the CFPB and HUD pages were read the same day and carry their own review dates. Every dollar and month figure on this page was computed independently of the calculator, at fifty significant digits, and then checked against it. Nothing you type leaves your browser. Part of the QuikUtil tools collection; the Loan Calculator covers the same arithmetic for a loan that is not a mortgage, and the Compound Interest Calculator is the version where the balance grows instead.
No, and the gap is usually hundreds of dollars. It is the principal-and-interest line only. Regulation Z requires a Loan Estimate to itemise a housing payment on four lines: “Principal & Interest”, “Mortgage Insurance”, “Escrow”, and “Total Monthly Payment”, the last “calculated as the sum” of the first three (12 CFR 1026.37(c)(2)). On $304,000 at 6.5% over thirty years, principal and interest is $1,921.49; add escrow for a $4,800 tax bill and $1,800 of insurance and the total is $2,471.49 before any mortgage insurance, so the figure above is about 78% of it.
Regulation X caps it rather than setting it. A servicer may charge “a monthly sum equal to one-twelfth (1/12) of the total annual escrow payments which the servicer reasonably anticipates paying from the account”, plus “an amount to maintain a cushion no greater than one-sixth (1/6) of the estimated total annual payments” (12 CFR 1024.17(c)(1)(ii)). So on $6,600 a year of taxes and insurance the monthly escrow is $550 and the cushion the servicer may hold is up to $1,100. The amounts being escrowed are next year’s bills, which nobody has seen yet, so the figure is revised annually and can also be revised for a shortage.
Because only the principal-and-interest line is fixed. The CFPB states the mechanism directly: “Your property taxes and insurance premiums can change from year to year. Your escrow payment—and with it, your total monthly payment will change accordingly.” A fixed-rate mortgage fixes one of four lines. Regulation Z even anticipates the rest moving, requiring the Loan Estimate to carry “a statement that the amount disclosed… can increase over time” next to both the escrow figure and the taxes and insurance estimate (12 CFR 1026.37(c)(2)(iii) and (c)(4)(iii)).
On the figures this page opens with, $300,000 at 6.5% over thirty years, the scheduled payment is $1,896.20 and the interest over 360 payments is $382,633.47. Paying $2,096.20 instead clears the loan in 277 payments with $279,184.67 of interest: $103,448.79 and 83 months saved, for $200 a month. The leverage comes from the shape of early amortisation. In month one, $1,625.00 of that $1,896.20 is interest and only $271.20 touches the debt, so a $200 addition is a 74% increase in the amount of principal being repaid that month.
They can bring the cancellation you request forward, and they do not move the automatic one. Both tests use the original value of the home, but they read different balances. You may ask in writing at 80%: the CFPB says “You can ask to cancel PMI ahead of the scheduled date, if you have made additional payments that reduce the principal balance of your mortgage to 80 percent of the original value of your home.” The automatic termination at 78% is tied to the schedule, “the date when your principal balance is scheduled to reach 78 percent”, so prepaying does not advance it. On a $304,000 loan against a $320,000 purchase at 6.5%, the schedule reaches 80% in month 124; $200 a month extra reaches it in month 81, which is 43 months of premiums you can ask to stop paying.
On a conventional loan yes, on an FHA loan it depends on the down payment. Conventional PMI has three exits: a written request at 80% of original value, automatic termination at 78%, and a backstop at the halfway point of the amortisation schedule, which the CFPB describes as ending PMI “the month after you reach the midpoint of your loan’s amortization schedule”, month 181 of a thirty-year loan. FHA annual mortgage insurance has no such test. Under HUD Mortgagee Letter 2023-05, on a term over fifteen years it runs “11 years” where the loan-to-value is 90% or less and for the “Mortgage term” where it is above 90%. A 3.5% down payment therefore buys insurance for the life of the loan, and no amount of prepaying removes it.
Send it as its own payment, instruct the servicer in writing that it is a principal reduction, and then read the next statement. A “periodic payment” is “an amount sufficient to cover principal, interest, and escrow (if applicable) for a given billing cycle”; anything less is a partial payment the servicer may hold “in a suspense or unapplied funds account” until enough accumulates (12 CFR 1026.36(c)(1)(i) and (ii)). Your monthly statement must show the breakdown of what was applied to principal, interest, escrow and fees “and the amount, if any, sent to any suspense or unapplied funds account” (12 CFR 1026.41(d)(3)(i)). If a figure appears on that last line, the money is parked and is not reducing anything.
Rarely, and the limits are specific. A prepayment penalty on a covered transaction is only permitted where the rate cannot increase, the loan is a qualified mortgage and it is not higher-priced, and the creditor must also have offered you a comparable loan without one (12 CFR 1026.43(g)(1) and (g)(3)). Where one exists it “must not apply after the three-year period following consummation” and cannot exceed “2 percent, if incurred during the first two years” or “1 percent, if incurred during the third year” of the balance prepaid (1026.43(g)(2)). Your own disclosure says whether yours has one; 12 CFR 1026.18(k)(1) requires it to.
The interest rate from your note, which is what the rate field asks for, and not the APR from your Loan Estimate. The two are different measurements and the arithmetic here needs the first. The APR is “a measure of the cost of credit… that relates the amount and timing of value received by the consumer to the amount and timing of payments made” (12 CFR 1026.22(a)(1)), so it already has the fees and the schedule folded into it; using it as a note rate produces a payment nobody will bill. The Loan Estimate prints the warning in the words Regulation Z dictates: “Your costs over the loan term expressed as a rate. This is not your interest rate.” On $300,000 over thirty years, entering an APR of 6.78 instead of a 6.5% note rate overstates the monthly figure by $55.58.
No. One fixed rate for the whole term, one balance, one extra payment amount held constant. It does not reset a rate, re-amortise after a lump sum, model a refinance, or account for the fact that prepaying a fixed-rate mortgage does not reduce next month’s required payment: it shortens the schedule instead. If you need the required payment reduced rather than the term shortened, that is a recast, and it is a separate request to your servicer with its own fee.
No. It is arithmetic, with its sources named. It cannot see your taxes, your insurance, your mortgage insurance premium, your escrow analysis, your loan documents or whether the money would do more somewhere else. Nothing on this page recommends prepaying.