VVoxen Tools

Mortgage Extra Payment Calculator

An extra $200 per month on a $300,000, 30-year mortgage at 6.5% saves about $103,000 in interest and pays the loan off roughly 7 years early. Enter your loan details above to see your exact numbers.

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How it works

The calculator runs a monthly amortization simulation. Each month, your payment is split into interest (current balance × monthly rate) and principal (payment minus interest). An extra payment is applied directly to principal, so the next month's interest is calculated on a smaller balance. This compounds — each extra dollar saves the interest it would have accrued for every remaining month of the loan.

Worked example

Take a $300,000 mortgage at 6.5% for 30 years. The base payment is about $1,896 per month, and total interest over the life of the loan is roughly $383,000. Add $200 per month extra: the loan now ends in about 23 years instead of 30, and total interest drops to about $279,000 — saving roughly $103,000 for $72,000 of extra payments.

Assumptions

  • Fixed-rate loan: Assumes a fixed APR with no payment changes
  • Extra payment timing: Extra payments apply monthly alongside the regular payment
  • No fees: No prepayment penalties, fees, or escrow are modeled
  • Rates: Your actual rate and lender rules may differ

What the result means

The interest-saved figure is the real value of the trade-off: it's what you keep by paying the loan down faster. But compare it against what the same $200/month would earn invested at your expected return — if you expect to beat your mortgage rate after taxes, investing may win. Many homeowners do a mix: invest some, prepay some. Paying off early also improves cash-flow flexibility and reduces risk.

Frequently asked questions

Is making extra mortgage payments worth it?

Usually yes if your mortgage rate is higher than what you'd reliably earn investing after taxes, and you already have an emergency fund and retirement contributions on track. The calculator shows the exact interest savings so you can compare against investment returns.

How much does an extra $100 a month save on a mortgage?

On a $300,000 loan at 6.5% for 30 years, $100 extra per month saves roughly $61,000 in interest and shortens the loan by about 4 years. Savings scale with your balance, rate, and the extra amount.

Is it better to pay extra on the mortgage or invest?

Compare your mortgage APR (after tax deductions) with your expected after-tax investment return. If investments are expected to earn more, invest. If the mortgage rate is higher, prepay. Liquidity matters too — an emergency fund should come first.

Should the extra payment go to principal?

Yes — specify that the extra amount is applied to principal, otherwise the lender may treat it as an advance of the next payment, which doesn't reduce interest.

Does the payoff date actually move when I pay extra?

Yes, provided extra payments are applied to principal. The calculator shows the new payoff time; your lender can confirm the recalculated schedule.

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This calculator is an estimate for informational purposes only and is not financial advice. Your actual interest savings depend on your lender's amortization rules, rate changes, and fees. Consult a financial professional before making prepayment decisions.