Last updated: October 5, 2026
Paying more than your required mortgage payment is one of the simplest ways to save money on a home loan. Every extra dollar goes straight to principal, which means less interest is charged in every month that follows. The earlier you start, the more you save.
All examples below use a $300,000, 30-year fixed loan at 6.5% with a required payment of $1,896.20. Without extra payments, you would pay about $382,633 in interest over 30 years.
How extra payments change the schedule
Interest each month is calculated on your remaining balance. When you pay extra principal, the balance drops faster, so next month’s interest is smaller and more of your regular payment goes to principal. The effect compounds over time. If you are new to this, start with how mortgage amortization works.
Monthly extra payments
| Extra each month | Loan paid off in | Total interest | Interest saved |
|---|---|---|---|
| $0 | 30 years | $382,633 | – |
| $50 | 27.8 years | $349,052 | $33,582 |
| $100 | 26.0 years | $321,639 | $60,995 |
| $200 | 23.1 years | $279,185 | $103,449 |
| $500 | 17.5 years | $202,874 | $179,759 |
Even $50 a month, about the cost of a streaming bundle, saves over $33,000 and more than two years of payments.
Other ways to pay extra
Biweekly payments (or one extra payment a year)
Paying half your payment every two weeks adds up to 26 half-payments, or 13 full payments, per year. You can get the same result by adding one-twelfth of your payment, $158.02 in our example, each month. That pays off the loan in about 24.2 years and saves about $87,256. Be cautious with third-party biweekly programs that charge setup or transaction fees for something you can do yourself for free.
An annual lump sum
Putting a $1,000 tax refund or bonus toward principal once a year pays the loan off in about 26.7 years and saves about $50,339.
A one-time lump sum
A single $10,000 payment at the end of year one saves about $50,230 in interest and shortens the loan by about 2.6 years. The same $10,000 paid in year ten saves about $24,871. Timing matters because early money avoids interest for longer.
Before you start: four checks
- Make sure extra money goes to principal. Use your servicer’s “additional principal” option or include a note. Otherwise, it may be applied to next month’s payment instead.
- Check for prepayment penalties. Most conventional loans made today do not have them, but confirm in your loan documents.
- Build an emergency fund first. Money paid into your home is hard to get back without selling or borrowing.
- Pay off higher-interest debt first. Credit cards and personal loans usually charge far more than your mortgage.
Extra payments vs. other options
- Recasting: after a large lump sum, a recast lowers your required monthly payment instead of only shortening the loan. See mortgage recasting explained.
- A shorter term: a 15-year loan forces faster payoff and usually has a lower rate. Compare in 15-year vs. 30-year mortgage.
- Removing PMI sooner: extra payments help you reach 80% of your home’s original value faster, so you can request PMI cancellation. See what PMI is and how to get rid of it.
Try it yourself
Enter your loan in our mortgage calculator and use the “Extra principal” field to see your new payoff date and total interest instantly.
Frequently asked questions
How much can extra mortgage payments save?
On a $300,000, 30-year loan at 6.5%, paying $100 extra every month saves about $60,995 in interest and ends the loan about four years early. Paying $200 extra saves about $103,449.
Is it better to make biweekly payments?
A true biweekly plan makes 26 half-payments a year, which equals 13 full payments. You get the same benefit by adding one-twelfth of your payment each month, without signing up for a plan that may charge fees.
Do extra payments lower my monthly payment?
No. On a fixed-rate loan, extra principal payments shorten the loan, but the required payment stays the same. To lower the payment after a large lump sum, ask your lender about a recast.
Should I pay extra on my mortgage or invest?
It depends on your mortgage rate, your other debts, whether you have an emergency fund and whether you are getting any employer retirement match. Paying down a mortgage gives a guaranteed return equal to your interest rate; investment returns are not guaranteed.
Sources: CFPB: Buying a House. Calculations by ToolStackIA using the standard amortization formula, assuming extra amounts are applied to principal in the month paid.
This article is for educational purposes only and is not financial advice. Loan programs, rates and rules change; confirm details with your lender or a HUD-approved housing counselor.