Payoff Timeline Comparison
Sample Payment Schedule (First 5 Years)
| Year | Regular Payment | Extra Payment | Principal Paid | Remaining Balance |
|---|
Frequently Asked Questions
How much will $500 extra per month save on a 30-year mortgage?
On a $350,000 mortgage at 6.5%, paying $500 extra each month will save you approximately $156,000 in interest and pay off your loan 8+ years early. That's retiring your mortgage by 2034 instead of 2056!
Should I make extra mortgage payments or invest the money?
It depends on your interest rate and risk tolerance. If your mortgage rate is above 5-6%, extra payments offer a guaranteed "return" at that rate. If your rate is lower, investing in index funds (historically ~10% return) may build more wealth—but comes with risk.
Is it better to make biweekly payments or one extra payment per year?
They're nearly equivalent. Biweekly payments result in 13 full payments per year (26 half-payments = 13 full). One extra annual payment achieves similar results. Pick whichever fits your cash flow better.
Do extra payments go toward principal or interest?
Extra payments should go directly to principal (verify with your lender). This reduces your loan balance faster, which means you pay less total interest over the life of the loan.
Is there a penalty for paying off my mortgage early?
Most modern mortgages don't have prepayment penalties, but check your loan documents. If there is a penalty, it's typically only during the first few years and may still be worth it given the interest savings.