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Mortgage With $300 Extra a Month
Start with a $250,000 mortgage at 6 percent over 30 years. Then add $300 a month. The calculator shows the new payoff time and the interest you avoid.
Paying $1,798.88 instead of $1,498.88 saves $111,459 of interest over the life of the loan.
How the extra payment works
Interest each month is the balance times 0.5 percent. The payment of $1,498.88 covers the interest, with the rest going to principal. An extra $300 adds to the principal part so the balance falls faster and the interest charge shrinks.
Worked example
Over the full 30-year term the regular payments cost $289,595 in interest. Adding $300 a month reduces that by $111,459.
For every dollar of extra payment you avoid about 1.55 dollars of interest.
Questions about this calculator
What if you doubled the extra payment to $600 on the same loan?
The loan would end in 15 years 2 months and save $158,646 of interest. That is $47,186 more than $300 a month saves.
Is $300 extra a month worth it on a $250,000 mortgage at 6 percent?
That depends on your other goals. The extra money cuts 10 years 1 month from the loan. The calculator cannot weigh what else you could do with $300 a month.
Would paying the same total as one lump sum at the start beat $300 a month?
The extra payments total about $71,700. Paid at the start as one lump sum, that money would save $196,425 of interest instead of $111,459. Money paid earlier cuts the balance sooner. Few people have that cash on day one so the monthly habit is the practical route.
How much do the extra payments total on a $250,000 loan with $300 a month?
About $71,700 over 19 years 11 months.
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This page is for education only and is not financial or tax advice.