Total interest saved
$0
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Payoff without extra
30 yrs
SIDE-BY-SIDE COMPARISON
No extra
Monthly payment
—
Total paid
—
Total interest
—
Payoff date
—
PAYOFF TIMELINE
Without extra payment
30 yrs
Year-by-year breakdown
How your balance, interest, and principal change each year — with and without the extra payment.
| Year |
Balance (no extra) |
Balance (with extra) |
Interest paid |
Interest saved (cumulative) |
Frequently asked questions
Does extra payment go toward principal or interest?
Any amount above your required monthly payment goes directly toward reducing your principal balance. This is powerful because a lower principal means less interest accrues each subsequent month — the savings compound over the life of the loan.
Should I pay extra on my mortgage or invest instead?
It depends on your interest rate. If your mortgage rate is 7% and you can reliably earn 8–10% in an index fund, investing likely wins mathematically. But paying off debt is a guaranteed return equal to your rate, is risk-free, and provides peace of mind. Many people do both — a partial extra payment plus regular investing.
Do I need to tell my lender the extra is for principal?
Yes — make sure to mark extra payments as "apply to principal" or your lender may apply it to your next month's payment instead, which doesn't reduce your balance. Check your lender's online portal or payment instructions.
What if I can't afford a consistent extra payment?
Even irregular lump-sum payments (tax refund, bonus) toward principal have a significant effect. A single $5,000 lump sum early in a 30-year loan at 7% can save over $20,000 in interest and cut several months off your term.
Does my mortgage have a prepayment penalty?
Most modern US mortgages do not have prepayment penalties, especially FHA, VA, and conventional loans originated after 2014. However, some adjustable-rate mortgages and older loans may. Check your loan documents or call your servicer before making large extra payments.