Extra Mortgage Payments: Time and Interest Saved at $100, $200, and $500 a Month
October 29, 2026
Making extra principal payments reduces the balance faster, so less interest accrues in every later month. Because interest is calculated on the remaining balance, early extra payments have the biggest effect.
Consider a $300,000 mortgage at 6.5% for 30 years. The monthly principal and interest payment is $1,896.20, and the total interest over 30 years is $382,633.
Skip the math and get your answer instantly:
Open the Mortgage Calculator →Results of Extra Payments
Adding $100 a month shortens the loan to 26.0 years (312 payments) and cuts total interest to $321,639, saving $60,995. Adding $200 brings it to 23.1 years (277 payments) with interest of $279,185, saving $103,449. Adding $500 leads to payoff in 17.5 years (210 payments), with interest of $202,874, saving $179,759. The savings are large relative to the extra money paid: with $200 extra, the extra payments total about $200 × 277 = $55,400 and save $103,449 in interest, nearly $1.87 saved for each extra dollar.
| Extra per month | Payoff time | Total interest | Interest saved |
|---|---|---|---|
| $0 | 30.0 years | $382,633 | $0 |
| $100 | 26.0 years | $321,639 | $60,995 |
| $200 | 23.1 years | $279,185 | $103,449 |
| $500 | 17.5 years | $202,874 | $179,759 |
Compare With Other Uses of Money
Paying extra on a 6.5% mortgage is a guaranteed 6.5% return (not taxable, and not reduced by market risk). If you can earn more by investing after tax (for example, in a retirement account with an employer match), investing may come first. High-interest debt like credit cards at 20% should be paid before the mortgage. An emergency fund is more important than extra mortgage payments, since home equity is not liquid. If your mortgage rate is 3% or lower, investing the money may be better; at 6.5%, the guaranteed return competes well with bonds and savings accounts.
How to Make Extra Payments
Tell the servicer to apply the extra amount to principal; otherwise, it may be held as an advance payment. Options: round up the payment, make a 13th payment each year (equal to $158 a month extra), or pay biweekly if the servicer applies them correctly. Check for a prepayment penalty (uncommon for modern conventional loans). Keep the tax deduction in mind: if you itemize, the interest deduction falls as you pay down the loan.
Caveats
The table assumes a fixed rate and consistent extra payments. If you have a variable-rate loan, results will differ. Run your numbers with your actual balance and rate. This article is educational, not financial advice.
Frequently Asked Questions
How much does $200 extra a month save on a $300,000 loan at 6.5%?
About $103,000 in interest, and about 7 years off the term.
Why do early extra payments matter more?
Because the balance is highest early on, so interest savings accumulate longest.
Is it better to pay extra or invest?
It depends on your mortgage rate, investment returns, risk tolerance, and other debts.
How do I ensure extra money goes to principal?
Specify it with the servicer.
What is a 13th payment?
One extra monthly payment a year, equal to about 1/12 more each month.