How this calculator works
A mortgage payment is split every month between interest and principal. Early on, most of it is interest — which is why a 30-year loan can cost you nearly as much in interest as the house itself. The trick to escaping that is simple: any money you pay above your required payment skips the interest entirely and goes straight to principal. That shrinks the balance faster, which means less interest accrues next month, which frees up even more of each future payment to attack principal. The effect compounds, and it's why even a modest extra payment can lop years off the loan.
This tool runs your mortgage two ways — with and without your extra payments — month by month. It shows the new payoff date, the total interest you'd save, and how many years earlier you'd be debt-free. You can add a recurring monthly extra, a one-time lump sum, or both, and watch the savings change instantly.
The method
Each month interest accrues on the balance, your full payment is applied, and the extra goes entirely to principal:
The difference between that payoff timeline and the original schedule is your time and interest saved.
- Required payment: about
$2,212/month; left alone, the loan costs roughly$446,000in interest over 30 years. - Add $300/month: it's paid off in about
21.8 years— over8 years early— saving close to$143,000in interest. - Add a $20,000 lump sum instead: saves around
$100,000in interest by removing principal that would have compounded for decades.
Should you pay extra at all?
Paying down a mortgage early is a guaranteed, risk-free return equal to your interest rate — a 6.5% mortgage paid down is effectively a guaranteed 6.5% return, which is excellent for a risk-free move. The honest counter-argument is opportunity cost: if your rate is low and you could earn more investing, the math may favour investing the difference instead, especially inside tax-advantaged accounts. A sensible order for most people: capture any employer retirement match first, clear high-interest debt, build an emergency fund, then weigh extra mortgage payments against investing based on your rate. Note that extra payments shorten the term but don't lower your required monthly payment unless you refinance or recast.
Frequently asked questions
How much faster will extra payments pay it off?
A lot, because the extra goes entirely to principal. On a 30-year loan, a few hundred dollars a month often cuts 5–10 years and saves tens to hundreds of thousands in interest. This tool gives your exact figures.
Pay extra on the mortgage or invest?
Paying extra is a guaranteed return equal to your rate, risk-free. Investing may earn more but isn't guaranteed. Often: grab any employer match first, then pay down if the rate is high relative to expected returns, otherwise invest.
Does paying extra lower my monthly payment?
No — it shortens the term and cuts interest, but the required payment stays the same. To lower the payment you'd refinance, or recast after a large lump sum if your lender allows it.
Should I make sure it goes to principal?
Yes — tell your lender extra amounts are "principal-only," or they may apply it to next month's payment instead. Most online portals have a principal-only option.