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Calculate Your Extra Payment Savings
Enter your loan details and extra payment amounts to see a side-by-side comparison.
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Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
Calculate your extra payment savings
How Extra Payments Save You Money
Every dollar you pay above your required mortgage payment goes straight to your principal balance. That means less money sitting there collecting interest next month, and the month after that, and every month until the loan is paid off. The savings compound over time because you're shrinking the base that interest is calculated on.
The biggest bang for your buck comes early in the loan. During the first few years of a 30-year mortgage, roughly 80% of each payment goes to interest. An extra $200 in year one displaces far more interest than $200 in year twenty, because that principal reduction ripples forward through decades of payments.
Real Example: $200/Month Extra
Loan: $300,000 at 6.5% for 30 years
Standard payment: $1,896/month
With $200/month extra: $2,096/month
Interest saved: $97,920
Time saved: 5 years, 3 months
New payoff: Year 25 instead of Year 30
That $200/month turns into almost $98,000 in savings. You're not earning that return in a savings account. And unlike stock market gains, the savings are guaranteed the moment you make the payment.
3 Extra Payment Strategies
1. Monthly Extra Payments
Pick a number you can handle every month and add it to your payment. Even $100 or $200 makes a real difference over 30 years. The consistency is what matters here. You won't miss $200 after a couple months, but your future self will notice six figures in interest savings.
Best for: People with steady income who want a set-it-and-forget-it approach.
2. Annual Lump Sum
Got a tax refund? Year-end bonus? Throw it at the mortgage. A $5,000 annual payment knocks years off your loan without changing your monthly budget at all. You keep your normal cash flow and still make serious progress on the balance.
Best for: People who get annual bonuses, tax refunds, or seasonal income.
3. One-Time Lump Sum
Inheritance, insurance payout, or sold some stock? A single large payment early in the loan has an outsized impact. $20,000 applied to principal in year two of a 30-year mortgage can save you over $40,000 in interest because that money would have been collecting interest for 28 more years.
Best for: Windfalls like inheritance, insurance payouts, or investment gains.
Should You Make Extra Payments?
Extra payments aren't always the best move. Your mortgage is probably the cheapest debt you'll ever carry, so the math depends on what else you could do with that money.
Good Reasons to Pay Extra
- You already have a 3-6 month emergency fund
- Your mortgage rate is above 5-6% (hard to beat that guaranteed)
- You want the mortgage gone before retirement
- Sleeping better matters more than optimizing returns
- You're close to 20% equity and can drop PMI
Maybe Hold Off If
- You don't have an emergency fund yet
- You're carrying credit card or high-interest debt
- Your mortgage rate is below 4% (invest the difference)
- You haven't maxed out your 401(k) or IRA
- You might need that cash within 2-3 years
Quick math:If your mortgage rate is 6.5%, every extra dollar you pay earns a guaranteed 6.5% return. Compare that to whatever else you'd do with the money. If you can reliably earn more than 6.5% after taxes elsewhere, invest instead. If not, pay down the mortgage.
Frequently Asked Questions
How do extra payments shorten my loan?
Extra principal payments skip ahead in your amortization schedule, so you pay down principal without paying the corresponding interest. On a $400k loan at 7% for 30 years, adding $200/month in principal shaves 6 years off the loan and saves $108,000 in interest. An extra $500/month cuts 12 years and saves $187,000.
How much interest do I save with extra payments?
About $108,000 on a typical scenario. A $400k loan at 7% for 30 years costs $958,000 total in payments. Adding $200/month in principal ($2,400/year) drops the total to $850,000 while also cutting the loan from 30 years to 24 years. The first years of extra payments save the most because they reduce the principal balance that's accruing interest.
Is there a prepayment penalty?
Yes on most loans originated after 1982. The Garn-St. Germain Act eliminated prepayment penalties on most residential mortgages, though some non-QM and commercial loans still have them. Check your note; the section labeled "prepayment" tells you. Never pay points up front to buy down a rate on a loan you plan to prepay heavily; the math rarely works.
Are biweekly payments worth it?
Biweekly payments (half your monthly payment every two weeks) produce 26 half-payments per year, equivalent to 13 monthly payments, so you effectively make one extra payment per year. On a $400k loan at 7%, that shaves 6 years and saves $108,000 in interest. Most servicers don't accept biweekly payments directly; you can achieve the same result by dividing your monthly payment by 12 and adding that amount as extra principal each month.
Should I invest the money instead of prepaying?
Extra principal makes sense if your mortgage rate exceeds what you'd earn risk-free elsewhere (currently 4% to 5% in Treasury bills). At 7% mortgage rates, prepaying almost always beats bonds. It usually beats an S&P 500 investment on a risk-adjusted basis too, since home equity is tax-advantaged and lower-volatility. Exception: maxing out 401(k) match and HSA always come first; those are free money.
How do I ensure extra payments go to principal?
Mark the extra amount clearly as "principal only" on the check or online payment. Most servicer portals have an "additional principal" field. If you don't specify, some servicers apply the extra to next month's payment instead of principal, which does nothing for your amortization. Confirm with a statement that your principal balance dropped by the full extra amount.
Explore More Calculators
Use our full mortgage calculator for a complete amortization analysis, or compare refinancing options.