Pay Additional Principal Now or Later - What Saves More?

This example shows how much more money you can save by making extra payments early on your mortgage. Let's compare identical mortgage loans where you make monthly extra payments of $100 for 10 years of the 30 year mortgage. The only difference is that in one case you only make the extra payments during the first 10 years and in the other case you only start making the extra payments after 10 years. After reviewing this example, use the extra payment calculator to find out how much you can save on your mortgage.

Extra Payment Savings
If you paid an extra $100 every month for the first 10 years you would pay off this mortgage 44 months early and save approximately $45,897 in interest. However, if you made the same extra payments starting after 10 years you would only pay off this mortgage 24 months early and save approximately $19,338 in interest. Thus, by simply starting the same extra payments earlier your interest savings increase by $26,559 and you would pay off your mortgage 20 months earlier!
Monthly principal and
interest payment
$1,397$1,297$100 Increase
Months from now
until payoff
31636044 Months Early
Total interest to be paid$221,091$266,988$45,897 Savings

Mortgage Calculator - Help

Extra Payment
The amount of additional principal that you plan to add to your mortgage payment. To get the financial benefit of paying down your principal balance early, direct your mortgage servicer to use the extra payment to pay down the mortgage balance immediately rather than giving you a credit towards your next scheduled payment. Some loans restrict how fast you can pay off your loan and may even have prepayment penalties. Refer to your mortgage documents, including the prepayment penalty rider, if any, to determine if this applies to you. You should also check with your mortgage servicer to make sure that extra payments you make do not trigger a prepayment penalty.
Extra Payment End
The number of months from now that you plan to make your last extra payment of principal.
Extra Payment Frequency
The frequency is how often you plan on making extra payments of principal. Some homeowners add an extra payment of principal to their mortgage payment every month. Others may choose to pay extra principal on a quarterly, semi-annual, annual or one-time basis to better match the times when they have more cash available. For example, borrowers who receive a regular bonus or tax refund may wish to use them to pay down the principal balance of their mortgage.
Extra Payment Start
The number of months from now that you plan to make your first extra payment of principal.
The portion of your mortgage payment that is due to the interest rate being applied to the principal balance. The Total Interest for a mortgage is the sum of all interest paid over the life of a loan.
Interest Rate
The percentage of the principal balance of your mortgage that determines how much interest you must pay. The interest rate on your mortgage may change or remain the same depending on the type of loan you have.
Loan Amount
The initial principal balance or your mortgage at closing.
The portion of your mortgage payment that is used to pay down the current balance of your mortgage. The principal balance represents how much you owe on the mortgage.
The amortization term is one of the key factors that determine your required mortgage payment. Your required mortgage payment for fully amortizing mortgages is the amount that would result in the mortgage being closest to being paid off by the end of the amortization term. Longer amortization terms result in lower required mortgage payments for fully amortizating mortgages, all other things being equal.