How extra payments save interest
Every extra dollar goes straight to principal. A lower balance means less interest is charged the next month, so more of each regular payment also goes to principal. The effect compounds, which is why even small extra payments can take years off a mortgage.
The calculator keeps your regular payment the same, adds the extra amount each month and applies the one-time payment right away, then compares the result with the original schedule.
Example
Paying an extra $200 a month on a $300,000 balance at 6.5% with 25 years left saves $68,042 in interest and pays the loan off 4 years 9 months sooner.
Other ways to pay off a mortgage faster
- Make biweekly half payments: that adds up to one extra monthly payment a year.
- Put windfalls such as tax refunds or bonuses toward principal.
- Refinance to a shorter term if rates allow. Compare with the refinance calculator.
Frequently asked questions
Is there a penalty for paying off a mortgage early?
Most US home loans have no prepayment penalty, but some do. Check your loan documents or ask your servicer before making large extra payments.
How do I make sure an extra payment goes to principal?
Tell your servicer to apply the amount to principal. Otherwise it may be held as an early regular payment.
Should I pay extra or invest the money?
Paying extra earns a guaranteed return equal to your mortgage rate. Investing may earn more but carries risk. Many people first build an emergency fund and pay off higher-rate debt.