Cleared in
24y 2m (290 months)
Find out how many payments a recurring extra principal payment removes from your mortgage, how much interest it saves, and where the point of diminishing returns sits. The table below runs the whole ladder at once.
The extra amount is assumed to be applied to principal in the month it is paid, and paid every month without interruption. A lender that holds the money until the end of the year, or applies it as a credit against the next instalment, will produce a different result.
| Extra each month | Cleared in | Payments removed | Interest saved |
|---|---|---|---|
| No extra | 30y | 0m | $0 |
| +$50 | 28y 3m | 1y 9m | $42,518 |
| +$100 | 26y 8m | 3y 4m | $78,233 |
| +$200 | 24y 2m | 5y 10m | $135,371 |
| +$500 | 19y 2m | 10y 10m | $244,013 |
| +$1000 | 14y 6m | 15y 6m | $337,730 |
The scheduled payment is unchanged by this tool. What changes is that an additional amount is added to it every month, and that amount goes entirely to principal rather than to interest. The balance therefore falls faster than the original schedule required, and because interest is charged on the balance, less interest accrues on every remaining month.
One dollar of extra principal does two things at once. It removes that dollar from the balance, and it removes every future interest charge that dollar would have generated for the rest of the term. The second effect is far larger than the first, which is why small amounts of money produce disproportionate results — and why the size of the effect depends so heavily on when the payments start.
On the default figures — $400,000 at 7.28% over 30 years, scheduled payment $2,736.85 — an extra $200 a month clears the loan in 290 months instead of 360. That is 70 payments removed, and $135,371 of interest that never accrues.
The scale of that is worth pausing on. An extra $200 a month for 290 months is $58,000 of additional money. It removes $135,371 of interest. The saving is roughly 2.3 times the amount paid, and the reason is that each extra dollar suppresses interest charges on itself for decades.
The ladder in the calculator above is there because the relationship is not linear and the interesting part is where it bends. Going from $50 to $100 a month removes 19 further payments. Going from $500 to $1,000 — ten times the increment — removes 56. Each additional dollar buys less than the one before it, because the balance is already falling faster and there are fewer future months left for the money to suppress. The pair of numbers is what matters: $50 a month is affordable and removes 21 payments; $1,000 a month is transformative and removes 186. The right figure is the largest one you can sustain without it becoming the first thing you cancel.
The tool cannot model a delayed start, because the answer depends on when you begin, and a table of every possible start month would be useless. The direction of the effect is deterministic, though, and worth understanding before you decide to wait.
The saving from an extra payment equals the future interest those dollars would have attracted. Interest accrues on the outstanding balance, so the dollars paid early sit on a large balance and suppress a large interest charge; the identical dollars paid ten years later sit on a much smaller balance and suppress much less. Early extra payments are worth several times as much as late ones, dollar for dollar.
There is a second, sharper reason not to postpone. The months closest to the end of a schedule are the ones where almost the entire payment already goes to principal, so extra payments made then have very little interest left to remove. Paying extra in the last five years of a mortgage mostly just finishes it sooner, which may be worth doing for its own reasons but is not a saving in interest.
If the decision is genuinely between starting now and starting in a year, the arithmetic favours now — unless the reason for waiting is building an emergency reserve, which is discussed below and is usually the better call.
Paying down a mortgage at 7.28% earns a guaranteed, tax-relevant 7.28% on the money prepaid. That is the relevant comparison figure: not the stock market, not an advertised promotional rate, but the return on cash you already hold. Against the returns actually available on deposits, the mortgage rate wins by a wide margin.
| Where the money could go | Rate | Source and date |
|---|---|---|
| This mortgage, prepaid | 7.28% | Freddie Mac PMMS, 2026-10-01 |
| 12-month certificate of deposit, national average | 1.73% | FDIC, September 2026 |
| Money market account, national average | 0.63% | FDIC, September 2026 |
| Savings account, national average | 0.37% | FDIC, September 2026 |
The gap between 7.28% and 0.37% is not a rounding difference. It is the difference between a return that compounds on a loan balance for the remaining term and a return that barely covers the erosion of purchasing power. On genuinely comparable risk — an insured deposit account — prepayment is not close.
Two qualifications keep this honest. First, prepayment is illiquid: money paid into a mortgage is not available in an emergency without borrowing it back at a worse rate. Second, money could go to a higher-returning use that is not a deposit account, and this tool does not rank those options because the ranking depends on your circumstances and on risk you are willing to take. What this page establishes is the guaranteed return you are giving up, which is 7.28% — and that is a high bar for any alternative to beat on a certainty.
Three situations argue against prepaying even when the arithmetic looks favourable.
There is also a structural option worth knowing about. Some lenders will, on request and usually for a small fee, re-amortise the loan after a large lump sum — that is, recalculate the scheduled payment to spread the reduced balance over the remaining term. That lowers your required monthly payment rather than shortening the loan, which is a different objective from the one this tool models. This calculator assumes the payment stays fixed and the term shortens, which is what happens by default.
Monthly extra payments produce a slightly better result than the same total paid once a year, for a mechanical reason: the money reaches the balance sooner, so it suppresses interest for more months. The difference over a 30-year schedule is real but not large. Choosing the schedule you will actually keep matters more than the difference between them, and a lump sum is easier to abandon in a difficult year.
No, and this is the single most common misunderstanding about prepayment. The scheduled payment stays exactly where it was; what changes is how many payments there are. Your payment drops only if you ask the lender to re-amortise the loan after a lump sum, which is a separate request and is not always offered. The calculator on this page models the default behaviour: fixed payment, shorter term.
This page can tell you the guaranteed return you earn by prepaying — your mortgage rate — which on the default figures is 7.28%. It cannot tell you what an investment will return, because nobody can. The fair comparison is between a certain 7.28% and an uncertain alternative, and that comparison depends on your risk tolerance and time horizon rather than on arithmetic. What the tool rules out is the idea that a low-yield deposit account competes: the FDIC national savings rate was 0.37% in September 2026.
They can, in one specific way. Mortgage interest is deductible for some US taxpayers who itemise, so paying less interest means less to deduct. The effect only bites where deductions exceed the standard deduction, and this tool does not model it: interest is reported gross. If you itemise, the after-tax return on prepayment is lower than your headline mortgage rate, and that difference is worth calculating with a tax professional rather than estimating here.
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Cluster us/mortgage · Unit us-mortgage-extra-payment-calculator · Engine amortizing-loan / extra · Method: Same amortizing-loan engine as the payment calculator, with a fixed extra amount added to principal each month and the schedule re-solved until the balance reaches zero.