See how extra principal payments reduce total interest, shorten your loan term, and when prepaying beats investing elsewhere.
See how much you would saveYes — extra payments go straight to principal
Every dollar above your required payment reduces your loan balance. That lowers the interest charged on future payments, which compounds over time. On a 30-year loan, even $100–$200 per month extra can save tens of thousands in interest and cut years off the term.
Our calculator shows exact interest saved and an updated payoff date when you enter an extra monthly payment. The savings are real and guaranteed — unlike investment returns, prepaying has a known “return” equal to your mortgage rate.
How much you can save
On a $350,000 loan at 6.5% for 30 years, paying an extra $200 per month might save roughly $80,000+ in interest and pay off the loan six to seven years early. Larger extras accelerate savings further.
Lump-sum payments — from a bonus, tax refund, or sale — work the same way. Confirm with your lender that extra payments apply to principal and that you face no prepayment penalties (most conventional loans have none).
When investing might beat prepaying
If your mortgage rate is low (for example, below 4%) and you have decades until retirement, investing extra cash in a diversified portfolio may earn more over time — though with market risk. Also prioritize high-interest debt and a full emergency fund before aggressive prepayment.
Many homeowners split the difference: modest extra mortgage payments plus retirement contributions. Model your specific loan in our calculator to see the guaranteed savings from prepaying versus keeping the cash flexible.
Ready to run the numbers for your situation?
See how much you would save