$121,700 saved
What are extra mortgage payments?
Extra mortgage payments go directly to your loan principal, reducing the balance on which interest is calculated for every remaining month. On a $200,000 loan at 7.5%, paying just $300 extra per month saves about $86,000 in total interest and pays off the loan eight years early.
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Try calculatorKey takeaways
04 · ideas- Extra payments go directly to principal, not interest
- $300/month extra on a $200k loan saves $86,000 in interest
- Start early — extra payments are most valuable in year 1
- Even $50/month extra makes a meaningful difference
Illustrative chart
$200k · 7.5% · 30yr
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An extra mortgage payment is any amount you pay beyond your required monthly payment. When you pay extra, that money goes directly to reducing your loan balance (principal) — not to interest.
Why does this matter? Because mortgage interest is calculated as a percentage of your remaining balance. A lower balance means less interest accrues each month. Less interest means more of your regular payment reduces principal. This creates a snowball effect that accelerates payoff dramatically.
A simple example:- Loan: $200,000 at 7.5% for 30 years
- Regular payment: $1,398/month
- Total interest without extra payments: $303,000
- Add $300/month extra: total interest drops to $217,000 — saving $86,000 and cutting 8 years off the loan