Extra $100 a Month on Your Mortgage: How Much It Saves

On a $350,000, 30-year mortgage at 6.5%, paying an extra $100 a month from the first payment ends the loan in 26 years and 6 months instead of 30, and saves $62,627.05 in interest. You pay $31,800 in extra principal along the way. The earlier the extra money goes in, the more each dollar saves.

Why Early Extra Payments Save the Most

A fixed-rate mortgage charges interest each month on the balance you still owe. At the start, the balance is at its largest, so most of the payment is interest.

On the $350,000 loan at 6.5%, the monthly principal-and-interest payment is $2,212.24. In the first month, $1,895.83 of it is interest ($350,000 × 0.065 ÷ 12) and only $316.40 goes to principal. An extra $100 that month raises the principal you pay off by about 32%.

Every dollar of principal you remove stops being charged 6.5% a year for the rest of the loan. That is why the same $100 does far more in year 1 than in year 21, when there are fewer months left for it to save interest.

Worked Example: $350,000 at 6.5% for 30 Years

The standard payment comes from the usual amortization formula:

Adding a fixed extra amount every month, starting with the first payment, gives these results:

"Extra you paid" is the extra amount times the number of months until payoff: $100 × 318 months = $31,800. Each extra dollar saves about $1.97 of interest at $100 a month ($62,627.05 ÷ $31,800).

Savings grow with the extra amount, but not in proportion. Doubling from $100 to $200 raises the interest saved by 1.73 times, not 2 times ($108,096.83 ÷ $62,627.05). The loan ends sooner, so there are fewer months left in which to save interest.

At a higher rate the effect is larger. On the same $350,000 at 7.03%, the average 30-year rate in Freddie Mac's survey for the week of September 24, 2026, the payment is $2,335.61 and an extra $100 a month saves $71,847.41.

Timing Matters More Than Amount

Start the same $100 in month 241 (year 21) instead of month 1, and it saves only $4,560.47 and ends the loan 7 months early. By then the balance has fallen to $194,828.49 and only 120 months remain, so there is much less future interest left to cut.

If you can only afford to prepay for a few years, those years are worth more at the start of the loan than at the end.

Ways to Make the Extra Payment

The schedule you choose matters less than sticking with it. Three common options on the same $350,000 loan:

• Add $100 to every payment. Saves $62,627.05 and ends the loan in month 318. This is the simplest, and most servicers let you set it up in online autopay.
• Pay $1,200 once a year. Paying the same $1,200 as a single payment at the end of each year saves $60,142.84 and ends the loan in month 319. It saves slightly less because the money goes in later, but it can suit people who get a yearly bonus or tax refund.
• Round up. Paying $2,300 instead of $2,212.24 puts about $88 a month toward principal with no extra budgeting.

Whichever you choose, you can stop at any time. Extra payments are voluntary, so a tight month does not put you behind on the loan.

Check These Before You Start

• Prepayment penalty. The Consumer Financial Protection Bureau (CFPB) says penalties usually apply only if you pay off the whole loan within a set period, often three or five years, or pay a large lump sum. They do not normally apply to small extra principal payments. Read your note or ask your servicer.
• Where the money goes. Mark the extra amount as "principal only." Otherwise a servicer may hold it or apply it to next month's payment, which saves nothing.
• Higher-cost debt first. Credit card accounts that paid interest averaged 22.15% APR in early 2026, per the Federal Reserve. Paying those off first saves more per dollar than prepaying a 6.5% mortgage.
• Cash you can reach. Money paid into a mortgage can only come back out through a sale or new loan. Keep an emergency fund in place before prepaying.

What This Doesn't Cover

These figures cover principal and interest only. They leave out taxes, insurance and escrow, the mortgage interest deduction if you itemize, private mortgage insurance, adjustable-rate loans and biweekly payment programs. If you are weighing prepaying against investing or other debts, a fee-only financial planner or a HUD-approved housing counselor can review your full picture.

Sources: CFPB, What is a prepayment penalty?; Freddie Mac Primary Mortgage Market Survey (7.03% on Sep 24, 2026); Federal Reserve G.19 Consumer Credit (credit card rates).