How much can I save with extra payments?
Basic level
The essentials · 1 min
Based on a $200,000 loan at 7.5% for 30 years (base payment: $1,398/month):
| Extra/month | You save | You finish |
|---|---|---|
| $100 | ~$43,000 | ~2 years early |
| $300 | ~$86,000 | ~4 years early |
| $500 | ~$121,700 | ~5 years 7 months early |
| $1,000 | ~$160,000 | ~8 years early |
Even $100/month extra has a massive impact because compound interest works against you over decades.
Intermediate level
How it applies · 1 min
Why small amounts matter so much
On a 30-year loan, you pay $303,434 in interest — more than the original $200,000 you borrowed. Every dollar you eliminate from the balance today stops generating ~30 years of future interest charges.
Year 1 vs Year 20 comparison:
In Year 1, your balance is ~$198,000. Every $1,000 extra eliminates roughly $750 in future interest (because $1,000 at 7.5% over 20 remaining years compounds significantly).
In Year 20, your balance is ~$130,000. Every $1,000 extra only eliminates roughly $200 in future interest (fewer years remain).
Cumulative savings by starting month:
| Start month | $300/mo saves | vs starting month 1 |
|---|---|---|
| Month 1 | $86,000 | baseline |
| Month 24 | $78,000 | −$8,000 |
| Month 60 | $65,000 | −$21,000 |
| Month 120 | $44,000 | −$42,000 |
The earlier you start, the more you save — even by a few months.
Advanced level
The math, step by step · 1 min
Sensitivity analysis: extra payment vs. interest rate
The new payoff term as a function of extra payment E:
Total interest saved:
Savings table for our $200k loan at 7.5%:
| $E$ | $n'$ (months) | Time saved | $\Delta I$ | $\Delta I / E$ ratio |
|---|---|---|---|---|
| $0 | 360 | — | — | — |
| $100 | 323 | 37 mo | $43,200 | 432× |
| $300 | 312 | 48 mo | $85,900 | 286× |
| $500 | 296 | 64 mo | $121,700 | 243× |
| $1,000 | 255 | 105 mo | $159,800 | 160× |
The \Delta I / E ratio decreases with higher E — there are diminishing returns, though all ratios remain >> 1.