What happens if you pay an extra $200 toward your mortgage?

Why can small additional payments make a difference?

A fixed-rate mortgage typically calculates interest each month on the remaining principal. When an extra payment lowers the balance, later interest charges are based on a smaller amount. Because this effect compounds through the remaining repayment schedule, even modest extra principal can shorten the payoff period.

The example starts with a $280,000 remaining balance, 6.5% APR, 30 years left and an extra $200 every month. Change the inputs to match your loan. The tool calculates a standard scheduled principal-and-interest payment, simulates monthly interest on the balance and then applies both the standard and extra amounts until paid off. The last payment is capped at the remaining amount.

How to make sure extra money goes toward principal

Ask your mortgage servicer how it applies additional payments. A lender may require you to mark the amount as “additional principal,” and your online payment interface may have a specific field. If extra money is treated as a future regular payment rather than principal reduction, this estimate will not describe what happens.

What's missing from the projected savings?

This is a principal-and-interest model, not a full monthly housing-cost model. Property taxes, homeowners insurance, HOA fees, mortgage insurance, and any escrow payment continue independently. The projection assumes a fixed interest rate, regular monthly payments, no missed payments and no payment-processing fees. Variable rates, biweekly schedules, refinancing, and investment returns are not modeled.

Should you always pay extra?

Not necessarily. Extra principal generally becomes home equity rather than easily available cash. Consider emergency savings, higher-interest debt, employer retirement matching and your ability to handle a surprise expense before putting spare money into the mortgage. Check loan documents for restrictions or prepayment penalties; some loans have them, though small monthly extra principal payments usually are not penalized.

For a new home purchase with tax and insurance costs, start with the mortgage payment calculator. To compare the interest on a regular loan, visit loan payment.

Assumptions and limits

Fixed-rate, fully amortizing principal-and-interest projection with a user-entered balance and remaining term. The calculator does not account for escrow, fees, payment timing rules, penalties, taxes, changing rates or investments. Confirm principal application with your servicer.

Independent references

• CFPB: How mortgage principal is paid down
• CFPB: What is a prepayment penalty?

Continue calculating

First published and reviewed: November 3, 2026. Calculations are self-contained and use the hypothetical values shown above.