How the calculator works
- Your mortgage now: what you owe, the rate and the years left give your current payment.
- Paying extra: an extra amount with every payment, a one-off lump sum, or both. Your payment stays the same, so the mortgage ends sooner.
- The difference: how much sooner it’s paid off, and the interest you save.
How much paying extra saves
$300,000 at 6.5% with 25 years left, repaid at $2,025.62 a month, costs $307,687 in interest if you pay nothing extra:
| Paying extra | Paid off in | Sooner by | Interest saved |
|---|---|---|---|
| $100 a month | 22 years, 4 months | 2 years, 8 months | $38,719 |
| $200 a month | 20 years, 3 months | 4 years, 9 months | $68,043 |
| $500 a month | 15 years, 11 months | 9 years, 1 month | $125,589 |
| $1,000 a month | 11 years, 11 months | 13 years, 1 month | $176,305 |
| $5,000 now | 24 years | 1 year | $19,529 |
| $10,000 now | 23 years, 1 month | 1 year, 11 months | $37,551 |
| $25,000 now | 20 years, 7 months | 4 years, 5 months | $84,188 |
Every extra dollar goes straight to the principal, so you stop paying interest on it for the rest of the loan. That’s why money paid early saves the most.
Extra each month or a lump sum?
Both help, and the sooner money goes in, the more interest it saves. A regular extra payment builds up over the years; a lump sum works hardest when it’s paid early in the loan. Many people do both: a little extra each month, and a lump sum when a bonus or tax refund comes in.
Before you pay extra
- Keep an emergency fund. Money paid into your mortgage is hard to get back quickly. See how much to keep in an emergency fund.
- Clear higher-interest debt first. Credit cards and personal loans usually cost far more than a mortgage.
- Get your full 401(k) match. An employer match is an instant return that paying extra on a mortgage can’t beat.
- Compare with saving. If your savings earn more after tax than your mortgage rate, saving can come out ahead.
- Check for a prepayment penalty. Most US mortgages have none, but check your loan documents, and ask your lender to put extra towards the principal.
Other ways to pay less interest
A lower rate cuts the interest on every payment: see whether refinancing would pay off in the refinance calculator. To see your full monthly payment and schedule, use the mortgage calculator.