A mortgage payoff calculator answers one question: what happens if you pay a little extra every month?
About this calculator
A mortgage payoff calculator answers one question: what happens if you pay a little extra every month? On a ₹40 lakh home loan at 8.5% with 18 years left, the regular EMI is about ₹36,800. Add ₹5,000 each month and the loan can close several years early, saving lakhs in interest without waiting for a yearly lump-sum prepayment.
This tool compares two paths side by side. The baseline path uses the standard amortisation schedule from your remaining principal, rate and tenure. The accelerated path adds your extra monthly amount on top of the EMI and recalculates month by month until the balance hits zero. The gap between the two schedules is your interest saved and months saved.
Extra monthly payments work differently from a one-time prepayment. They compound: every month the surplus reduces principal, which lowers next month's interest, which means more of the next payment hits principal. Over 10–15 years that snowball is often larger than most borrowers expect. Pair this with the [[home-loan-prepayment-optimizer]] calculator if you are choosing between a lump sum and monthly top-ups, and run [[debt-to-income]] to confirm the extra payment still leaves room in your monthly budget.
Common uses
- Checking how ₹3,000–₹10,000 extra per month changes a ₹35–50L home loan
- Deciding between increasing EMI vs waiting for an annual bonus prepayment
- Modelling payoff after a salary hike when you can afford a higher outflow
- Showing a co-borrower the rupee impact of consistent extra payments
- Comparing interest saved at 8% vs 9% for the same extra payment amount
Frequently asked questions
How much interest can I save with extra monthly payments on a ₹40L home loan?
On ₹40 lakh at 8.5% with 18 years left, paying ₹5,000 extra each month typically saves ₹12–15 lakh in interest and cuts 4–5 years off the tenure. The exact number depends on your rate and how early you start the extra payments.
Is it better to pay extra every month or prepay once a year?
Monthly extras start reducing interest from month one, so they usually beat a single annual prepayment of the same total amount. A lump sum still helps if that is all you can manage — use the home loan prepayment calculator to compare both paths on your loan.
Do banks charge a penalty for extra EMI payments in India?
Floating-rate home loans from banks cannot charge prepayment penalties under RBI rules. Fixed-rate loans may have a fee — check your sanction letter. Extra payments on floating loans are free and you can stop anytime.
Should I invest the extra amount in SIP instead of paying off my mortgage?
If your loan rate is 8–9% and you expect 11–12% from equity SIP over 10+ years, investing can win on paper. But prepaying gives a guaranteed return equal to your loan rate with zero market risk. Run both numbers before deciding.
What happens if I stop making extra payments after a few months?
Any extra you already paid reduced your principal permanently. When you stop, the loan continues on the lower balance at the regular EMI — you still keep the interest savings from the months you paid extra, just without further acceleration.