Mortgage guide

What happens if you pay an extra $200 a month on a 30-year mortgage?

Q: How much does an extra $100 a month save on a mortgage?

On a $300,000, 30-year mortgage at 6.5%, an extra $100 a month saves about $60,995 in interest and shortens the loan by about 4 years.

By Sergio Ruiz · Last reviewed: October 8, 2026

The short answer

On a new $300,000, 30-year mortgage at 6.5%, paying an extra $200 a month saves about $103,000 in interest and pays the loan off about 6 years and 11 months early. Your own result depends on the loan size, the rate, and how early you start.

How much does an extra payment save on a $300,000 mortgage?

Without extra payments, the scheduled payment on this loan is $1,896.20 a month and the total interest over 30 years is $382,633. Here is what different monthly extras change.

Extra per month	Interest saved	Time saved	New payoff time
+$50	$33,582	2 yr 2 mo	27 yr 10 mo
+$100	$60,995	4 yr	26 yr
+$200	$103,449	6 yr 11 mo	23 yr 1 mo
+$300	$135,115	9 yr 2 mo	20 yr 10 mo
+$500	$179,759	12 yr 6 mo	17 yr 6 mo
+$1,000	$241,162	17 yr 3 mo	12 yr 9 mo

Assumptions: new $300,000 loan, 30-year fixed rate of 6.5%, extra amount applied to principal every month from the first payment. Calculated with the engine described in How the calculator works.

How the answer changes with loan size and rate

The same $200 a month does not have the same effect on every loan. This table shows the interest saved and the time saved on a new 30-year mortgage.

Loan amount	At 5%	At 6%	At 7%	At 8%
$200,000	$61,161 / 8 yr 8 mo	$79,801 / 9 yr	$101,014 / 9 yr 5 mo	$124,921 / 9 yr 10 mo
$300,000	$69,210 / 6 yr 5 mo	$91,173 / 6 yr 9 mo	$116,640 / 7 yr 1 mo	$145,906 / 7 yr 6 mo
$400,000	$74,138 / 5 yr 2 mo	$98,277 / 5 yr 5 mo	$126,617 / 5 yr 9 mo	$159,635 / 6 yr 1 mo
$500,000	$77,470 / 4 yr 3 mo	$103,145 / 4 yr 6 mo	$133,560 / 4 yr 10 mo	$169,348 / 5 yr 2 mo

Each cell shows interest saved / time saved with +$200 a month. 30-year fixed rate, extra amount applied to principal every month from the first payment.

Two patterns stand out. A higher rate makes the same extra payment save more interest, because more of each payment was going to interest. A smaller loan saves more time, because $200 is a bigger share of its payment.

Why do the first years matter so much?

On the $300,000 loan, the first payment of $1,896.20 includes $1,625.00 of interest and only $271.20 of principal. An extra $200 in that first month raises the principal reduction by 73.7%. Over the whole first year, 85.3% of what you pay goes to interest.

Because interest is charged on the remaining balance, every dollar of principal you remove early stops generating interest for the rest of the loan. That is why the same extra payment saves much more at the beginning of a mortgage than near the end.

One extra payment a year or a little more each month?

Both work, but earlier money works harder. On the same loan, one extra payment of $1,896.20 each December saves about $83,985 and shortens the loan by 5 years and 8 months. Spreading the same amount, $158.02 more each month, saves about $87,256 and 5 years and 10 months.

Before you start: five things to check

Prepayment penalty. Check your loan documents for any fee for paying early, and ask your servicer if you are unsure.
Where the money goes. Ask your servicer how to make sure extra money is applied to principal. For auto loans, the CFPB explains that payments are generally applied to fees, then interest, then principal; your mortgage servicer has its own instructions.
More expensive debt. If you carry debt at a higher rate than your mortgage, paying it down first generally avoids more interest.
Your safety net. Money sent to the mortgage is hard to get back. Keep an emergency fund before accelerating.
Taxes and alternatives. Mortgage interest may affect your taxes, and money can be used in other ways. A tax professional can tell you whether this changes your math.

Frequently asked questions

How much does an extra $100 a month save on a mortgage?

On the $300,000, 30-year mortgage at 6.5%, an extra $100 a month saves about $60,995 in interest and shortens the loan by about 4 years.

Will an extra payment lower my monthly mortgage payment?

No. Your scheduled payment stays the same and the extra principal shortens the loan instead. Some lenders offer a recast that recalculates the payment after a large principal payment; ask your servicer whether it is available and whether it has a fee.

Is it better to pay extra every month or make one extra payment a year?

Money that reaches the loan earlier saves more interest. On the $300,000 example, one extra payment of $1,896.20 each December saves about $83,985, while spreading the same amount at $158.02 a month saves about $87,256.

Is paying extra on a mortgage better than investing?

It depends on your mortgage rate, what you could earn after taxes and risk, and your other goals. Extra payments earn a certain return equal to the interest you avoid, while investing offers a possibly higher but uncertain return. This is general information, not personal advice.

Related guides

Try your own numbers. Enter your balance, rate and term, and see your payoff date and interest saved.

Open the calculator

Sources and method

All figures were calculated with the Financial Accelerator engine; the formulas and assumptions are public in How the calculator works. Other calculators can show slightly different results depending on when they credit the extra payment.
Consumer Financial Protection Bureau, Is it better to pay off the interest or principal on my auto loan? (reviewed January 30, 2024; about auto loans).

This page is educational and not financial, legal or tax advice. Confirm the terms of your own loan with your servicer.