Ask Numlight
Ask in plain English. Every number comes from our tested calculators.
Educational only, not financial advice. Your question is processed by our AI provider; please don't include personal details.
Which payoff strategy saves the most?
For a $300,000 balance at 6.5% with 30 years left (scheduled payment $1,896.20):
| Strategy | Payoff time | Total interest | Interest saved |
|---|---|---|---|
| Pay as scheduled | 30 yrs | $382,637 | — |
| $100 extra a month | 26 yrs | $321,641 | $60,996 |
| $200 extra a month | 23 yrs 1 mo | $279,187 | $103,450 |
| $500 extra a month | 17 yrs 6 mo | $202,875 | $179,762 |
| One extra payment a year | 24 yrs 4 mo | $298,651 | $83,986 |
| $10,000 lump sum in year 1 | 27 yrs 5 mo | $332,406 | $50,230 |
Assumptions
- The scheduled payment is the amount that pays off the current balance over the remaining term.
- Extra payments go entirely to principal; there's no prepayment penalty.
- Yearly extra payments are made with every 12th payment.
- Only principal and interest are shown; taxes and insurance don't change when you pay early.
Frequently asked questions
Is it better to pay extra on my mortgage or invest?+
Every extra dollar on a mortgage earns a guaranteed return equal to your interest rate. If your rate is high, prepaying is attractive; if it's low, investing may earn more over time but with risk. Many people do both — and keep an emergency fund first.
Does one extra payment a year really help?+
Yes. On a 30-year loan, one extra monthly payment per year typically takes several years off the term and saves tens of thousands in interest. The table above shows the exact effect for the example loan.
How do I make sure extra payments go to principal?+
Tell your servicer the extra amount is a principal-only payment — most online portals have a separate field for it. Check your next statement to confirm the balance dropped by the extra amount.
Are there prepayment penalties?+
Most US home loans today have no prepayment penalty, but some do in the first few years. Check your note or Closing Disclosure. This calculator assumes no penalty.
Calculator version 1.0.0. Results are estimates for educational purposes, not financial advice.