What an extra $100 a month does
Four years and $61,315, on a loan you already have.
Adding $100 a month to the principal on a $300,000 mortgage at 6.52% pays it off in 26 years instead of 30 and saves about $61,315 in interest. The extra payments add up to $31,200 — so the money comes back roughly twice over.
The numbers
A $300,000 30-year fixed loan at 6.52%, with a scheduled payment of $1,900.15, and each extra amount applied to principal every month:
| Extra per month | Paid off in | Total interest | Interest saved |
|---|---|---|---|
| Nothing | 30 yrs | $384,055 | — |
| $100 | 26 yrs | $322,740 | $61,315 |
| $200 | 23 yrs 1 mo | $280,096 | $103,959 |
| $500 | 17 yrs 6 mos | $203,496 | $180,558 |
Notice the shape: doubling the extra payment from $100 to $200 does not double the saving, it produces about 70% more. Each dollar of principal you remove also removes every future interest charge that dollar would have generated, so the effect compounds against itself.
Why early dollars are worth more
Interest accrues on the outstanding balance, and the balance is largest at the start. On this loan the very first payment splits $1,630 to interest and $270.15 to principal.
An extra $100 in that first month is therefore not a marginal contribution — it is a substantial fraction of the principal reduction happening at all. The same $100 in year twenty-five does far less work, because by then most of each payment is already principal and there is little future interest left to cancel.
The practical implication: if you are going to do this, starting is worth more than optimising the amount.
Getting it right mechanically
- Say it is for principal. Many servicers will otherwise hold extra money as a prepayment of next month's scheduled payment, or park it in escrow, which produces none of the effect above. Most portals have an explicit "additional principal" field.
- Check for prepayment penalties. Uncommon on modern conforming mortgages, but worth confirming rather than assuming.
- Recasting is a different thing. Some lenders will re-amortise your loan after a large principal payment, lowering the required monthly payment rather than shortening the term. That helps cash flow but forfeits most of the interest saving.
- Consistency beats size. $100 every month for years outperforms an occasional larger lump, mostly because it actually happens.
When not to do this
Extra mortgage payments produce a guaranteed return equal to your interest rate, which is genuinely good. They are still not always the best available use of the money:
- Higher-interest debt comes first. A credit card at 22% dwarfs a mortgage at 6.52%. See debt payoff versus an emergency fund for the ordering.
- An employer retirement match beats it. A match is an immediate return no mortgage rate competes with.
- Liquidity has value. Money in your house is hard to reach. A cushion you can actually access matters more than a slightly shorter term.
- Investing may return more. Higher expected return, no guarantee. At rates above roughly 6% the certain saving is competitive; below that, the argument tilts the other way.
Model your own loan
The effect scales with balance, rate, and how much of the term remains — so your numbers will differ, sometimes substantially.
Enter your real balance, rate, and payment, then add an extra amount and watch the payoff date and total interest move. What one percentage point costs you covers the other lever on the same loan, and there is no sign-up for either.
CuraMoneta is an educational tool and does not provide financial, tax, or legal advice. Example rate reflects the 30-year fixed average as of June 13, 2026 (Freddie Mac).