Mortgage Reducer
Calculate mortgage repayments and see how much interest you can save by paying more.
About Mortgage Reducer & Extra Repayment Calculator
The Mortgage Reducer calculates loan amortization schedules, monthly mortgage payments, and the dramatic interest savings achieved by making extra principal repayments, bi-weekly payments, or lump-sum contributions.
The Standard Amortization Formula
The fixed monthly mortgage payment (M) is determined using the standard financial amortization formula:
[M = P \frac{r(1+r)^n}{(1+r)^n - 1}]- (P) = Principal loan amount borrowed
- (r) = Monthly interest rate (annual interest rate divided by 12)
- (n) = Total number of monthly payments (loan term in years (\times 12))
How Extra Payments Reduce Total Interest
In standard loans, the early years of repayment are heavily weighted toward interest rather than principal. Every extra dollar paid directly reduces the outstanding principal balance, permanently eliminating the compound interest that would have accumulated on that dollar for the remainder of the loan term.
Frequently Asked Questions (FAQ)
What is the benefit of bi-weekly repayments?
Paying half your monthly mortgage payment every two weeks results in 26 bi-weekly payments per year—equivalent to making 13 full monthly payments instead of 12, shaving years off your mortgage.
Does this calculator include property taxes and insurance?
This tool computes principal and interest (P&I) amortization. Property taxes and homeowners insurance (PITI) can be added as custom fixed monthly add-ons.