Extra Payments on a Mortgage: What 200 a Month Actually Saves

A 250,000 mortgage at 6.5% over 20 years costs about 197,600 in interest — nearly another house. Adding 200/month to the payment cuts roughly two years and tens of thousands off that. The Loan & Mortgage Calculator shows exactly which months disappear and which euros stay in your pocket.

The mechanics of an annuity

The monthly payment comes from the classic closed form:

payment = r × amount ÷ (1 − (1 + r)⁻ⁿ)

where r is the monthly rate and n the term in months. What the formula hides is the split: each month's payment = interest on the remaining balance + whatever is left for principal. Early on the balance is huge, so interest dominates — a first payment on that mortgage is ~1,354 interest and ~511 principal. The amortization schedule makes this visible line by line, which is the fastest way to understand why extra payments early matter more than late ones.

How extras actually work

Extra amounts go straight to principal. The required payment doesn't change; the balance simply falls faster, so less interest accrues every following month and the loan hits zero sooner. The tool simulates this month by month and reports the two numbers that matter: interest saved and months cut. The balance chart overlays the with-extras trajectory against the baseline so the acceleration is visible, not just implied.

Edge cases worth knowing

• 0% financing divides the amount evenly across the term — the payment math still holds, interest is simply zero.
• The final month is a partial payment: when the remaining balance drops below the scheduled principal, the last payment shrinks to exactly what's owed. A correct schedule never shows a negative extra or an inflated final payment.

Limits, honestly

• Assumes a fixed rate for the whole term; variable-rate loans re-amortize at each adjustment.
• No escrow, insurance or fees — this is the loan math itself.
• Payoff comparisons ignore opportunity cost; sometimes investing the extra beats prepaying, depending on rates.

The saving side of the same math lives in the Compound Interest Calculator; for invoice-level tax math see the Discount & VAT Calculator.