Last Mortgage PaymentHow Much Does Paying $100 Extra a Month Save on a Mortgage?
Small, steady extra payments save more than most people expect. Here's exactly what different amounts do to a typical loan.
The example loan
- Loan amount: $300,000
- Rate: 6.5% fixed
- Term: 30 years
- Regular payment (principal and interest): $1,896.20
- Total interest with no extra payments: about $382,633
What each extra amount saves
Extra paid every month from the first payment:
| Extra per month | Paid off in | Time saved | Interest saved |
|---|---|---|---|
| $50 | 27 years, 10 months | 2 years, 2 months | $33,582 |
| $100 | 26 years | 4 years | $60,995 |
| $200 | 23 years, 1 month | 6 years, 11 months | $103,449 |
| $300 | 20 years, 10 months | 9 years, 2 months | $135,115 |
| $500 | 17 years, 6 months | 12 years, 6 months | $179,759 |
| $1,000 | 12 years, 9 months | 17 years, 3 months | $241,162 |
$100 a month takes four full years off the loan and saves about $61,000. Over those 26 years you'd put in $31,200 of extra payments, so each extra dollar saves nearly two dollars of interest.
Try $100 a month in the calculator →
Why the first dollars matter most
Look at the table again: going from $0 to $100 saves four years, but going from $500 to $1,000 saves under five more. Early on, most of each payment is interest (in month one of this loan, $1,625 of the $1,896 payment is interest), so any extra principal has an outsized effect. There's more on this in what an amortization schedule is.
Starting later still helps, but less
Timing matters. If you start the same $100 a month in year 10 instead of year 1, you save about 2 years, 1 month and $24,946. That's still worthwhile, but less than half the savings of starting right away.
The good news: you don't have to pick one amount forever. Many people start small and increase the extra payment after a raise, or when daycare or a car loan ends. In the calculator, add a change point for each of those moments and watch the payoff date move.
How to make it automatic
- Round up your payment. Turning $1,896.20 into $2,000 is an easy $103.80 a month.
- Set up a recurring extra payment with your servicer, marked as principal only.
- Raise it with your income. Each time you get a raise, add part of it to your extra payment before you get used to spending it.
Before committing, make sure you have an emergency fund and no higher-interest debt. See should you pay extra on your mortgage?
This article is general information, not financial advice. Examples are rounded and assume a fixed-rate loan; your lender's numbers may differ slightly.