Lump Sum vs Extra Monthly Payment
Which saves more — paying a lump sum now or adding extra to each monthly payment?
How to use this calculator
Enter your loan details and both strategies you want to compare. Strategy A applies a one-time lump sum today. Strategy B adds a fixed amount to your payment every month. The calculator shows which saves more total interest and cuts more time off your loan.
Does lump sum always win?
Usually yes, because a large amount applied immediately reduces the balance on which future interest accrues. But if the extra monthly amount is large enough, it can eventually surpass the lump sum's savings — especially on longer time horizons. The best answer depends on your specific numbers.
What if I can do both?
Even better. Apply the lump sum now to get an immediate principal reduction, then continue making extra monthly payments. You can model that in this calculator by entering both fields simultaneously.
Should I recast after a lump sum payment?
If you want a lower monthly payment rather than a shorter loan term, recasting makes sense after a large lump sum. Use the Mortgage Recast Calculator to see what your new payment would be.