Extra Mortgage Payment Calculator
How much can you save by making extra mortgage payments? See how additional monthly, yearly, or one-time payments reduce your interest and shorten your loan term.
Extra Mortgage Payment Calculator
See how much time and money you can save by making extra payments on your mortgage.
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Extra Payments
How Extra Mortgage Payments Save You Money
Making extra payments on your mortgage can save tens of thousands of dollars in interest and shorten your loan by years. On a $300,000 mortgage at 6.5%, just $200 extra per month saves approximately $98,000 in interest and pays off the loan 7 years early.
Extra mortgage payments go directly toward reducing your principal balance, not interest. This creates a compounding effect: a smaller principal means less interest charged each month, which means more of your regular payment goes to principal, which accelerates payoff even further.
On a typical $300,000 mortgage at 6.5% for 30 years, you would pay $382,633 in total interest (calculated using standard amortization formulas). Just $200 extra per month saves approximately $98,000 in interest and pays off your mortgage 7 years early. Try the calculator above to see the exact savings for your loan.
Extra Payment Strategies
- Round up your payment: If your payment is $1,897, round up to $2,000. That $103 extra saves thousands over time.
- Biweekly payments: Pay half your mortgage every two weeks instead of monthly. This results in 13 full payments per year instead of 12.
- Apply windfalls: Tax refunds, bonuses, and inheritances applied to your mortgage create instant interest savings.
- Dollar-a-month method: Add $1 more each month ($1 extra in January, $2 in February, etc.). By year-end you are paying $12 extra per month.
- Match your raise: When you get a salary increase, apply the difference to your mortgage before lifestyle inflation sets in.
Frequently Asked Questions
How much can I save with extra payments?
On a $300,000 loan at 6.5%, paying $200 extra per month saves about $98,000 in interest and pays off the mortgage 7 years early. Even $50/month extra saves over $30,000.
Should I make extra payments or invest?
If your mortgage rate exceeds 5-6%, extra payments are a guaranteed return at your interest rate. Below that, investing may earn more. Many advisors recommend a balanced approach: max retirement accounts first, then make extra mortgage payments.
Do extra payments go to principal?
Yes, extra payments go entirely toward principal, not interest. Always specify "apply to principal" when making extra payments to your lender to ensure they are applied correctly.
Is it better to pay monthly or lump sum?
Lump sum payments early in the loan save the most interest because they reduce principal immediately. Monthly extra payments are easier to budget. A combination of both works best for most homeowners.
How much does one extra payment per year save?
One extra payment per year on a $300,000 loan at 6.5% saves approximately $68,000 in interest and pays off the mortgage 4.5 years early. This is the simplest extra payment strategy.