How Much Can I Save by Paying Extra on My Mortgage?
See exactly when you will be mortgage-free.
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Frequently Asked Questions
- Does paying extra on my mortgage really save that much interest?
- Yes. Because extra payments reduce principal faster, less interest accrues over the life of the loan. The longer you have left, the bigger the savings.
- Can I pay extra on my mortgage at any time?
- Most lenders allow it anytime, but check your loan agreement. Some have prepayment penalties (up to 2% of balance) or annual overpayment limits (commonly 20% of original loan).
- Is it better to pay extra on my mortgage or invest the money?
- It depends on your interest rate vs. expected investment returns. At current mortgage rates around 6.75%, paying extra is essentially a guaranteed 6.75% return — which beats many low-risk investments.
- What happens if I can't pay extra every month?
- No problem. Any extra payment helps. Even a one-time lump sum reduces principal and future interest. You don't need to commit to a schedule.
- Will my monthly payment go down if I pay extra?
- No. Extra payments reduce principal, not your monthly payment. Your payment stays the same, but you'll pay off the loan faster and owe less total interest.
- How do I tell my lender to apply extra payments to principal?
- Include a note with your payment saying 'Apply extra to principal.' Or set it up online — most lenders have a checkbox. Otherwise, they might apply it to next month's payment instead.
- What if I have a 15-year mortgage instead of 30-year?
- The same logic applies. With a 15-year loan at a typical 5.75% rate, extra payments save less total interest because the loan is shorter, but you'll still save thousands and pay off even faster.
- Are there any tax implications of paying extra on my mortgage?
- Mortgage interest is tax-deductible for many homeowners, so paying extra reduces your deduction. But the interest savings usually outweigh the tax benefit. Consult a tax professional for your situation.
Stop Guessing. See Your Real Savings.
📊 Data sourced from publicly available industry standards. See our methodology page for formulas, sources, and limitations.
You've heard it before: make an extra payment, save thousands in interest. But generic examples never match your actual loan. Your rate, your balance, your extra payment — that's what matters. This calculator uses your numbers to show the exact interest savings and how many years you'll shave off. No math on our end. Just your results.How Overpaying Actually Works
When you send more than your minimum monthly payment, the extra goes straight to principal. That means less interest accrues over time. It's that simple. For a 30-year fixed loan at a typical rate of 6.75% and a balance of $350,000, even an extra $100 a month can save you tens of thousands in interest. I've found that people often underestimate how much small monthly overpayments add up. Honestly, this won't work if your loan has a prepayment penalty — but those are rare on conventional loans, usually capped at 2% of the outstanding balance if present.
Typical Mortgage Rates & Loan Amounts
Use these typical ranges as a starting point. Your actual numbers may vary.
What About Prepayment Penalties?
Most conventional loans let you pay extra without any penalty. Fannie Mae and Freddie Mac have no prepayment penalty on standard mortgages. But some loans — especially subprime or private ones — might charge up to 2% of the outstanding balance if you pay off early. Check your loan docs. If you're unsure, ask your lender.
Overpayment Limits
Some loans cap how much extra you can pay each year. Typical limits range from 0% to 100% of the original loan balance. The most common limit is 20% per year. That means if your original loan was $350,000, you can pay up to $70,000 extra annually without triggering a penalty. If you plan to pay more than that, check with your lender first.
Extra Payment Scenarios at a Glance
See how different overpayment amounts affect a typical $350,000 loan at 6.75% over 30 years. These are examples — use the calculator for your exact numbers.
Your Next Steps
Run the calculator with your actual numbers. See how much you can save. If the numbers look good, start small — even $50 extra a month makes a difference over time. Just make sure your lender applies the extra to principal, not to next month's payment. You'll want to specify that when you send the payment.
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