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Mortgage With $500 Extra a Month
What does $500 extra a month do to a $250,000 mortgage? This page starts from 6 percent over 30 years and adds $500 to each payment.
The regular payment is $1,498.88. Adding $500 cuts 13 years 7 months from the loan.
How the extra payment works
Start with the regular payment of $1,498.88. Each month the calculator adds $500 on top. The whole extra amount goes to principal because the interest for the month is already covered. A smaller balance means less interest next month.
Worked example
Without extra payments the loan costs $1,498.88 a month and $289,595 in interest. With $500 extra it ends in 16 years 5 months and the interest falls to $143,467.
For every dollar of extra payment you avoid about 1.48 dollars of interest.
Questions about this calculator
Would paying the same total as one lump sum at the start beat $500 a month?
The extra payments total about $98,500. Paid at the start as one lump sum, that money would save $229,537 of interest instead of $146,128. 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 $500 a month?
About $98,500 over 16 years 5 months.
Can I stop paying the extra $500 later?
Usually yes. The extra $500 is optional, so the required payment stays at $1,498.88. Check your loan terms for any rules on prepayment.
What if you doubled the extra payment to $1,000 on the same loan?
The loan would end in 11 years 8 months and save $192,087 of interest. That is $45,958 more than $500 a month saves.
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This page is for education only and is not financial or tax advice.