Buying a home

Mortgage Extra Payment Calculator

Q: Is it worth paying extra on a mortgage?

Every extra dollar goes straight at the balance, so it earns you a guaranteed return equal to your mortgage rate. On a 6.5% loan that is a solid, risk-free return, and it shortens the loan by years. The trade-off is that money is tied up in the house, so keep an emergency fund first.

Built and maintained by Chandranshu Kumar · Figures from the IRS, SSA, BLS and Freddie Mac

Adding $300 a month to a $320,000 loan at 6.5% saves about $138,446 in interest and clears the mortgage roughly 8 yr 10 mo early. Small, steady extra payments do a surprising amount of work. Enter your loan, rate and the extra you'd add each month below.

Interest Saved

$138,446

saved in interest, 8 yr 10 mo sooner

Loan amount

Interest rate

6.50%

Loan length

Extra per month

$300

Interest without extra$408,142

Interest with extra$269,696

You save$138,446

A guaranteed return

Paying down a mortgage early is one of the few sure things in personal finance. Because the extra goes straight at the balance, it saves you the interest you would have paid, which is effectively a risk-free return at your mortgage rate. On a 6.5% loan that is hard to beat safely. The catch is that the money is locked in the house until you sell or refinance, so build an emergency fund and clear any higher-rate debt first. After that, even $100 a month makes a real dent.

Compares the interest on your loan with and without the extra payment. Principal and interest only. Not financial advice.

How the saving is worked out

The tool builds the loan's normal amortization schedule first. At 6.5% over 30 years a $320,000 loan carries about $408,142 in interest across the full term if you pay only the required amount each month.

Then it runs the same loan again with your extra added to every payment. Because the required part already covers that month's interest, the whole extra lands on the principal and shrinks the balance faster. A smaller balance means less interest the next month, and the effect builds on itself. With $300 extra the total interest falls to about $269,696.

The gap between the two runs is what you save, $138,446 here, and the loan clears roughly 8 yr 10 mo earlier. The saving is really the interest that never gets charged once the balance is paid off ahead of schedule. See the full method.

Common questions

Is it worth paying extra on a mortgage?

Yes, in most cases. The extra earns a guaranteed return equal to your rate and shortens the loan by years. Just keep an emergency fund and clear higher-rate debt first.

Is a little each month or one lump sum better?

Both help, and the rule is the same: the sooner a dollar reaches the principal, the more interest it stops. Steady monthly extras start working right away and are easier to keep up, while a lump sum makes a bigger single dent. Adding a set amount every month, as this tool does, spreads the benefit across the whole loan.

Does an extra payment lower my monthly bill?

No. The required payment stays the same, set by the original loan. Paying extra shortens the term and cuts total interest instead of reducing the monthly amount due. To see how the base payment itself is built, use the mortgage calculator.