How much interest do I save by paying extra on my mortgage?

The savings depend on your balance, rate, and extra payment amount. On a $400,000 mortgage at 6.8% with 30 years remaining, paying $500/month extra saves approximately $128,000 in total interest and pays off the loan 9 years early. Higher rates and larger extra payments produce proportionally larger savings.

Is it better to make extra mortgage payments or invest the money?

At a 6.8% mortgage rate, the guaranteed return from prepayment is 6.8% after tax (since mortgage interest deduction phases out for most borrowers). The S&P 500 averages 10% long-term but with significant year-to-year volatility. If your rate is above 5% and you are in the later half of your loan, prepayment is often the more defensible choice. If your rate is under 4%, investing the difference in diversified equities typically produces better expected outcomes.

Does prepaying a mortgage affect the monthly payment?

No — making extra principal payments does not reduce your required monthly payment on a standard mortgage. The extra money goes entirely to principal, which shortens the loan term and reduces total interest. Your required minimum payment stays the same until payoff.

What is the formula for calculating mortgage prepayment savings?

To calculate interest savings from prepayment: (1) compute the standard amortization schedule to find total interest at the original term; (2) recompute the schedule with the higher monthly payment; (3) subtract new total interest from original total interest. The difference is your gross savings. The new payoff month is when the balance reaches zero in the accelerated schedule.

Is it worth paying off a mortgage early in the first 10 years?

Yes — early in the loan term, more of each payment is interest, so extra payments redirect the maximum possible dollar amount to principal reduction. Paying extra in years 1-10 of a 30-year mortgage at 6.8% saves more than the same total extra payments made in years 15-25.

Not Financial Advice. CalcMoney provides calculators for educational and planning purposes only. Results are estimates and do not constitute financial, tax, or investment advice. Consult a qualified professional before making financial decisions. Terms apply.

Real Estate

Mortgage Prepayment Calculator.

Enter your loan balance and extra monthly payment. See exactly how much interest you eliminate and how many years you cut off.

Loan Details

Loan Balance

Interest Rate (APR)

Remaining Term

yrs

Extra Monthly Payment

Prepayment Analysis30yr @ 6.80%

Interest Saved

$128,400

total lifetime savings

Time Saved

9yr 2mo

New Payoff

20yr 10mo

Original Term

30yr

Standard Total Interest

$532,000

With Prepayment

$403,600

Required Monthly

$2,610

Extra Payment

+$500

Balance Paydown Comparison

Standard schedule

With extra payment

2 free AI insights left

Interest Saved by Extra Monthly Payment Amount

Extra/Month	Rate	Balance	Interest Saved	Years Saved
$200	6.8%	$400K	$62,100	4yr 6mo
$500	6.8%	$400K	$128,400	9yr 2mo
$1,000	6.8%	$400K	$182,900	14yr 1mo
$2,000	6.8%	$400K	$223,600	20yr 4mo

Important Disclaimer

CalcMoney provides educational financial calculators for informational purposes only. Results are mathematical estimates based on the inputs you provide and do not constitute financial, tax, legal, or investment advice. Actual results may vary based on lender terms, tax regulations, market conditions, and individual circumstances. Always consult a qualified financial professional before making major financial decisions.

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