Mortgage Prepayment Comparison Calculator
Enter your remaining loan balance, annual interest rate, remaining term, and a lump-sum prepayment amount, and this tool estimates — assuming an equal-payment (amortizing) loan — how much interest you'd save, how many months you'd shorten the term by, or how much your monthly payment would drop, comparing "shorten the term" against "reduce the payment" prepayment strategies. To estimate a Japanese freelancer's take-home pay, try the Freelancer Take-Home Pay Calculator as well.
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Loan details and prepayment amount
Notes
- This is a simplified estimate assuming an equal-payment (amortizing) loan, where the monthly payment stays constant. It does not support equal-principal repayment, where the principal portion stays constant instead.
- The prepayment is assumed to be made in full, in one lump sum, at the time of the calculation. Real lenders have their own rules on prepayment timing, minimum amounts, and fees, so check with your lender for details.
- The interest rate is assumed to stay constant for the rest of the loan. With a variable rate, actual future interest will differ from this estimate if rates change.
- For the "shorten term" option, the new remaining term is an estimate rounded to the nearest whole month from a reverse calculation; the actual final payment may be adjusted for rounding.
- Costs other than interest — such as mortgage life insurance premiums, guarantee fees, or a prepayment handling fee — are not included.
Glossary
Prepayment (lump-sum principal payment)
A lump-sum payment applied directly to the loan principal, on top of the regular monthly payment. Reducing the principal lowers the interest that accrues afterward.
Shorten term
A prepayment strategy that keeps the monthly payment the same as before and shortens the remaining term instead. For the same prepayment amount, this generally saves more interest than the "reduce payment" option.
Reduce payment
A prepayment strategy that keeps the remaining term the same and lowers the monthly payment instead. It is chosen when the priority is easing the monthly household budget right away.
Amortizing (equal-payment) loan
A repayment method where the total monthly payment (principal + interest) stays constant over the life of the loan. Early payments are weighted toward interest, shifting toward principal over time. This is the standard structure for Japanese mortgages.
FAQ
What is the difference between shortening the term and reducing payments?
Shortening the term keeps monthly payments and finishes earlier, usually saving more interest. Reducing payments keeps the term and lowers each monthly payment, easing cash flow.
Does it support equal-principal repayment?
No. It assumes equal total payments (annuity style) each month and does not support equal-principal repayment.
Are guarantee fees and charges included?
No. Costs other than interest, such as life insurance premiums, guarantee fees and prepayment fees, are not considered. Rates are assumed constant even for variable-rate loans.
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