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We can walk through your loan and prepayment options together — no obligation.
Talk to UsEnter your loan details and a monthly prepayment amount to see your new payoff date, total interest saved, and the effective interest rate those extra payments create — all based on true monthly amortization.
Enter the numbers from your original loan, then add a prepayment amount to see its effect.
This is the rate a standard, non-prepaid loan would need in order to pay off in the same amount of time your prepayments create.
Starting from your loan amount, rate, and term, we calculate your standard monthly payment and run it month by month — the same way your loan servicer does.
Starting on your prepayment start date, the extra amount is added to principal each month, which reduces the balance interest is calculated on for every month that follows.
We solve for the interest rate that would let your original payment (with no extra) pay off the loan in the exact same amount of time your prepayments do. That rate is almost always lower than your note rate — it's what your prepayments are effectively worth.
It's the interest rate a standard loan — with no extra payments — would need in order to pay off in the same number of months your prepayments create. If prepaying moves your payoff from 30 years to 22 years, we calculate what rate would produce that same 22-year payoff using only your regular payment. That's your effective rate, and it's a way to see what your extra payments are actually worth.
No — your note rate stays exactly what your loan documents say. Prepaying reduces your balance faster, which reduces the total interest you pay over the life of the loan. The "effective rate" is a way to express that savings in rate terms, not an actual change to your loan.
Most conventional mortgages originated in recent years don't carry prepayment penalties, but it depends on your specific loan. Check your note or ask your loan officer before committing to a prepayment plan.
This calculator assumes a consistent monthly amount for simplicity. Occasional lump-sum payments will still reduce your balance and total interest, just less predictably than a fixed monthly plan — talk to us and we can walk through your specific situation.
We can walk through your loan and prepayment options together — no obligation.
Talk to Us