How Much Could Extra Mortgage Payments Save You?

See how an extra monthly payment could change your mortgage payoff date and reduce the amount of interest you pay.

A simple example

Suppose you have a $300,000 mortgage balance, a 6.5% interest rate, and 30 years remaining. The regular principal-and-interest payment is about $1,896 per month.

If you add $500 per month, the calculator estimates that the loan could be paid off about 12 years and 6 months earlier, while reducing total interest by roughly $180,000.

How extra mortgage payments work

Mortgage interest is calculated on the remaining loan balance. When you pay extra toward principal, the balance falls faster. A smaller balance means less interest is charged in future months.

Over a long mortgage term, even a relatively modest recurring extra payment can reduce both the payoff period and total interest cost.

What this calculator assumes

The calculator assumes a fixed interest rate and monthly payments. It models principal and interest only. It does not include property taxes, homeowners insurance, mortgage insurance, HOA fees, escrow changes, lender fees, or prepayment penalties.

Extra payments are assumed to be applied directly to principal each month. Your lender's actual payment-processing rules may differ.

The practical takeaway

Try several extra-payment amounts, such as $100, $250, or $500 per month. Comparing the results can help illustrate the tradeoff between keeping cash available today and reducing mortgage interest over time.

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