This calculator lets you put in both a one-time lump-sum extra payment and extra monthly payments that match your regular monthly payments. We also offer three other options you can consider for other additional payment scenarios.
If you’re a homeowner with a mortgage, you’ve probably wondered if making extra payments can help you pay off your loan faster and save money on interest. Specifically, you may be wondering if adding just $50 extra to your monthly mortgage payment can make a significant impact over the life of your loan
The short answer is yes—even an extra $50 a month could cut years off your loan term and save you thousands of dollars in interest. Keep reading to learn how paying a little extra each month can speed up your payoff date and lower the total amount of interest you pay your lender.
How Making Extra Payments Helps You Pay Off Your Mortgage Faster
One of the main things that your monthly mortgage payment does is pay off the principal balance. The interest charges take up most of the payment. This is very important when you first get your loan.
If you make an extra payment of even $50 every month, 100% of that $50 goes directly toward lowering your principal balance. In two main ways, this helps you pay off your loan faster.
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You’re paying extra money towards principal every month, which chips away at your balance.
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Since your principal balance is lower each month after making the extra payment, you accrue less interest. This saves you money.
The combination of these two factors – paying down principal faster and reducing your interest expenses – can shave years off your payoff timeline.
As an example, let’s look at a $200,000 mortgage with a term of 20 years and an interest rate of 3 percent. The regular monthly payment would be around $955. If you paid an extra $50 a month, you could pay off your loan almost 3 years early and save over $16,000 in interest!
The savings and accelerated payoff schedule can be even more dramatic if you’re able to contribute $100, $200 or more extra each month. But even small amounts make a difference – which is great news if you’re looking for manageable ways to pay your mortgage off faster.
When to Start Making Extra Payments for the Biggest Impact
You’ll maximize your interest savings and the number of years you can shave off your loan term if you start making extra payments as soon as possible.
Paying extra in the early years of your mortgage not only directly pays down more principal, but also reduces the balance on which you pay interest during the remainder of your loan. This creates a cascading effect which saves you more and more as the years go on.
For example, let’s say you have a $250,000 30-year mortgage and you start paying $100 extra each month beginning:
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In Year 1 of your loan: You’d pay off your mortgage 6 years and 2 months early and save $35,755 in interest.
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In Year 5 of your loan: You’d pay off your mortgage 4 years and 7 months early and save $22,345 in interest.
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In Year 10 of your loan: You’d pay off your mortgage 3 years and 3 months early and save $13,456 in interest.
As you can see, the savings are much greater when you begin making extra payments in the first year of your loan. But no matter when you start, any extra amounts will positively impact your payoff timeline and interest costs.
Strategies to Come Up With an Extra $50 Per Month
If you want to start paying an additional $50 or more towards your mortgage principal each month, you’ll need to find room in your budget. Here are some strategies to free up extra cash:
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Cut discretionary spending: Take a close look at your daily latte purchases, restaurant meals, entertainment budgets, etc. Finding even small ways to scale back discretionary spending can free up mortgage payment money.
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Pause retirement contributions: Temporarily reducing 401(k) contributions by $50 to $100 per month can allow more cash flow to direct to extra mortgage payments (make sure to ramp up again later).
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Pause college savings: If you have several years before college bills come due, you may be able to temporarily reallocate college savings to make extra mortgage payments now (again, make sure to increase later).
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Take on a side gig: Driving for a rideshare company on weekends or using professional skills to freelance on the side can generate extra income that goes straight towards extra mortgage payments.
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Reduce energy costs: Steps like turning down the thermostat, installing LED light bulbs and adding insulation can help shrink utility bills and provide cash to put towards principal payments.
Is Paying $50 Extra Per Month Right for You?
While paying extra can be beneficial, it’s important to weigh this strategy against your other financial priorities:
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If you have high-interest debt like credit cards or personal loans, it usually makes more sense to pay those down first before putting extra cash into your lower-interest mortgage.
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Make sure you have an emergency fund of 3-6 months of living expenses before prioritizing extra mortgage payments.
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Be aware of early payoff penalties – some mortgages charge a penalty for paying off your loan too fast.
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Consider other goals like saving for retirement, education, etc. Make sure extra mortgage payments don’t compromise other important priorities.
Overall, paying just $50 extra per month can make a real dent in your payoff timeline and interest costs. If your budget allows, it can be one of the easiest and most effective ways to become mortgage free faster. Use a mortgage calculator to run the numbers and see the potential impact for your specific loan situation.
Want to Make Irregular Payments? Do You Need More Advanced Calculation Options?
- Biweekly Payment Method: If you are making payments every two weeks, please use our biweekly mortgage calculator to figure out your 13th monthly payment.
- Should You Start Making Extra Payments in the Middle of Your Loan Term? If you do, enter the loan balance at the time you started making extra payments and set the loan term to the amount of time you still owe on the loan. For example, if you are 3. You would change the loan term to 26 years 5 years into a 30-year home loan. 5. 5 years, and the loan balance would be set to the amount that shows up on your statement. You can figure out the current balance even if you don’t have a statement. All you need to know is when the loan started and how much there was to borrow.
- Irregular Extra Payments: If you want to make extra payments that aren’t regular or that happen at different times than your regular payments, use our advanced additional mortgage payments calculator. It lets you make multiple extra payments at the same time with different frequencies as well as lump sum extra payments.
For your convenience current Los Angeles mortgage rates are published underneath the calculator to help you make accurate calculations reflecting current market conditions. Calculator Rates.
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| Interest Rate: See Current Los Angeles Rates | (%) |
| Loan Term: | (Years) |
| Additional Payment | Amount |
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| Initial Extra Payment: | ($) |
| Additional Monthly Loan Payment: | ($) |
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Calculating Your Mortgage Overpayment Savings
Start Paying More Early & Save Big
Want to build your home equity quicker? Use this free calculator to see how even small extra payments will save you years of payments and thousands of Dollars of additional interest cost. You will save more money over the life of the loan if you make extra payments early on. This is because the principal that has been paid off stops accruing interest for the rest of the loan. The earlier you begin paying extra the more money youll save.
Use the above mortgage over-payment calculator to determine your potential savings by making extra payments toward your mortgage. You can type in any amount between $10 and $1,000 to see how much you can save over the loan’s term. You can use the results to compare your financial options and decide if paying down your mortgage is the best way to save money or if you should put your money into other investments. If you’re almost done with your mortgage payments early, check to see if there is a penalty for paying off the loan early. If it does, you may want to leave a small balance until the prepayment penalty period expires.
Should You Make Extra Mortgage Principal Payments?
FAQ
Is it worth paying an extra $50 a month on a mortgage?
Paying a little extra towards your mortgage can go a long way. Making your normal monthly payments will pay down, or amortize, your loan. However, if it fits within your budget, paying extra toward your principal can be a great way to lessen the time it takes to repay your loans and the amount of interest you’ll pay.
What happens if I pay an extra $100 a month on my mortgage?
Making an extra $100 monthly mortgage payment can significantly reduce your loan term and the total interest paid. If you keep paying down the principal faster, the loan will last less time and you’ll save money on interest over time.
How do I pay off a 30-year mortgage in 10 years?
To pay off a 30-year mortgage in 10 years, you’ll need to make extra payments or increase your monthly payments. Making biweekly mortgage payments can also help you repay your loan faster (but probably not that quickly).
How many years will one extra mortgage payment take off?
PrimeLending and Yahoo Finance say that if you make one extra mortgage payment every year on a 30-year mortgage, the loan term could be cut by four to six years. This is because the extra payment goes straight toward the principal balance, which lowers the total interest paid and shortens the term of the loan.