The species–area relationship (SAR) has been used to predict the numbers of species going extinct due to habitat loss, but other researchers have maintained that SARs overestimate extinctions and instead one should use the endemics–area relationship (EAR) to predict extinctions. Here, we employ spatially explicit simulations of large numbers of species in spatially heterogeneous landscapes to investigate SARs and extinctions in a dynamic context. The EAR gives the number of species going extinct immediately after habitat loss, but typically many other species have unviable populations in the remaining habitat and go extinct soon afterwards. We conclude that the EAR underestimates extinctions due to habitat loss, the continental SAR (with slope ~0.1 or somewhat less) gives a good approximation of short‐term extinctions, while the island SAR calculated for discrete fragments of habitat (with slope ~0.25) predicts the long‐term extinctions. However, when the remaining area of land‐covering habitat such as forest is roughly less than 20% of the total landscape and the habitat is highly fragmented, all current SARs underestimate extinction rate. We show how the ‘fragmentation effect’ can be incorporated into a predictive SAR model. When the remaining habitat is highly fragmented, an effective way to combat the fragmentation effect is to aggregate habitat fragments into clusters rather than to place them randomly across the landscape.