How Much Do Extra Mortgage Payments Really Save?
Updated November 8, 2026
Paying a little extra toward your mortgage is one of the simplest ways to cut its total cost. Because each extra dollar reduces the balance that interest is charged on, the effect builds over time.
What extra payments do
Take a $320,000 mortgage at 6.5% for 30 years. The required principal and interest payment is $2,023, and you would pay $408,142 in interest if you made only that payment.
| Extra per month | Paid off in | Total interest | Interest saved |
|---|---|---|---|
| $0 | 30 yr | $408,142 | - |
| $100 | 26 yr 2 mo | $346,444 | $61,698 |
| $200 | 23 yr 5 mo | $302,714 | $105,428 |
| $500 | 18 yr | $222,590 | $185,552 |
An extra $100 a month adds up to about $31,400 of extra payments over those 26 years, and it saves about $61,700 in interest.
Earlier is better
An extra payment in year two removes that money from the balance for nearly the whole loan. The same payment in year 25 has little time left to save anything. If you plan to pay extra, starting soon has the most impact.
How to make sure it counts
- Mark it as principal. Many servicers have a separate field for this. Otherwise, the money may be treated as an early payment of next month's bill.
- Check for prepayment penalties. They are uncommon on standard home loans today, but read your loan documents.
- Look at your statement the next month to confirm the balance dropped by the full amount.
- Be careful with paid biweekly programs. Making half-payments every two weeks results in one extra full payment a year. You can get the same effect for free by adding one-twelfth of a payment each month.
When not to pay extra
Extra mortgage payments give you a guaranteed saving equal to your loan's rate, but the money becomes hard to get back. Your home cannot pay for a car repair. Consider these first:
- High-interest debt. A credit card at 24% should almost always be paid before a mortgage at 6.5%.
- An emergency fund. Many people aim for three to six months of expenses.
- Employer retirement match. If your employer matches contributions, that is usually hard to beat.
Whether to pay extra or invest after that depends on your rate, your taxes and how much risk you are comfortable with. Investing may earn more over long periods, but its returns are not guaranteed, while the interest you avoid on a mortgage is certain.
Recasting: another option
If you pay a large lump sum, some lenders will recast the loan for a small fee. Your rate and end date stay the same, but the required payment falls. Refinancing is not needed, though not all loans qualify.
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This article is general information, not financial, tax, legal or insurance advice. Figures are illustrative examples.