Small extras, big savings
Early in a mortgage, most of each payment is interest. Any extra amount goes straight to principal, which lowers every later month's interest and shortens the loan. On a $320,000 balance at 6.5% with 28 years left, an extra $200 a month removes almost six years and saves roughly $90,000 in interest.
A popular variation is paying half the monthly payment every two weeks. That adds up to 26 half-payments, or 13 full payments a year, which is the same as one extra payment annually. You can model it by entering one month's payment in the yearly box.
Pay down or invest?
Paying extra is a guaranteed, risk-free return equal to your mortgage rate. Investing may earn more on average but with ups and downs. With a 3% mortgage, many people prefer to invest; at 6.5% or more, extra payments become more attractive. Make sure you have an emergency fund and are capturing any retirement match first, since home equity is hard to access in a pinch.
Common questions
How much does an extra $100 a month save on a mortgage?
On a $300,000, 30-year loan at 6.5%, roughly $60,000 of interest and about 4 years.
Do biweekly payments really help?
Yes, because they add one extra full payment per year. Make sure your servicer applies them correctly.
Should I pay off my mortgage early?
It depends on your rate, other debts, savings and taxes. High-rate mortgages make a stronger case.
This calculator gives estimates for planning. Real returns, rates and prices change, so treat the result as a guide rather than a promise. Read how we build and check our calculators.