Mortgage guide

One extra mortgage payment a year: how much does it save?

By Sergio Ruiz · Last reviewed: October 8, 2026

The short answer

On a $300,000, 30-year mortgage at 6.5%, one extra payment of $1,896.20 each year saves about $83,985 in interest and shortens the loan by 5 years and 8 months. The time you save depends on your interest rate, not on how large the loan is.

How much does one extra payment a year save?

In every cell below, the extra payment equals one scheduled monthly payment, made once a year in December. Each cell shows the interest saved and the time saved on a new 30-year fixed-rate loan.

Loan amount	At 5.5%	At 6.5%	At 7.5%
$200,000	$39,534 / 4 yr 11 mo	$55,990 / 5 yr 8 mo	$76,479 / 6 yr 5 mo
$300,000	$59,301 / 4 yr 11 mo	$83,985 / 5 yr 8 mo	$114,718 / 6 yr 5 mo
$400,000	$79,068 / 4 yr 11 mo	$111,979 / 5 yr 8 mo	$152,957 / 6 yr 5 mo

Interest saved / time saved. The extra payment each year equals one scheduled payment: $200,000 loan: $1,136, $1,264 and $1,398; $300,000 loan: $1,703, $1,896 and $2,098; $400,000 loan: $2,271, $2,528 and $2,797 (at 5.5%, 6.5% and 7.5%). Method: How the calculator works.

Notice that the time saved is identical for every loan size at the same rate. Because the extra payment grows with the loan, it removes the same share of it. The interest saved, in dollars, grows with the size of the loan.

Does the month you pay it matter?

Yes. On the $300,000 loan at 6.5%, the same extra payment of $1,896.20 saves about $83,985 if you make it every December and about $90,553 if you make it every January. That is $6,568 more for the same money, because the principal falls earlier in each year and stops accruing interest sooner.

One payment a year or a little more every month?

On the same loan, spreading the extra amount over the year, $158.02 more each month, saves about $87,256 and 5 years and 10 months. That is slightly more than one payment in December ($83,985 and 5 years and 8 months), for the same reason: money that reaches the balance sooner saves more. If a yearly payment fits your budget better, it is still a strong option.

Is it the same as biweekly payments?

Close. Paying half of your payment every two weeks adds up to 26 half payments a year. That is 13 full payments instead of 12, or one extra payment a year. The result is similar to the tables above, but only if your servicer accepts partial payments and credits each one promptly. Some do not, or charge a fee for the service. Ask before you switch. See Biweekly vs monthly mortgage payments for the numbers.

Before you start

Check for a prepayment penalty. The CFPB says penalties do not normally apply to small extra principal payments, but recommends confirming with your lender and reading your loan documents.
Designate it as principal. Ask your servicer how to mark an extra payment as principal-only, and confirm on your next statement that the balance dropped by the extra amount.
Keep a safety net. Money sent to a mortgage is hard to get back, so keep an emergency fund first.
Compare with other uses. Debt at a higher rate, or goals with a deadline, may deserve the money first. A tax professional can tell you whether mortgage interest deductions change your math.

Frequently asked questions

Is one extra mortgage payment a year worth it?

On a $300,000, 30-year mortgage at 6.5%, one extra payment of $1,896.20 each year saves about $83,985 in interest and shortens the loan by 5 years and 8 months. Whether it is worth it for you depends on your other goals and on any prepayment penalty in your loan.

Does it matter when in the year I make the extra payment?

Yes. On the same loan, making the extra payment every January instead of every December saves about $90,553 instead of $83,985, because the money reaches the balance earlier.

Is one extra payment a year the same as biweekly payments?

Paying half your payment every two weeks adds up to 26 half payments, which is 13 full payments a year instead of 12, so the effect is similar to one extra payment a year. It only works if your lender accepts and credits the partial payments promptly.

How do I make sure the extra payment goes to principal?

Ask your servicer how to designate an extra payment as principal-only, and check your next statement to confirm that the principal balance dropped by the extra amount.

Related guides

Try your own numbers. Choose the yearly extra payment, the month you pay it and see your new payoff date.

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, What is a prepayment penalty? (reviewed September 11, 2024).

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