Why small extra payments save outsized interest
A mortgage payment is mostly interest at the start and mostly principal at the end. In the first years of a 30-year loan, the balance barely moves, because each payment first covers that month's interest on a still-large balance. An extra payment aimed at principal interrupts that pattern: it shrinks the balance itself, so next month's interest is calculated on less, so more of the regular payment reaches principal, so the balance falls faster again. The savings compound quietly for decades, which is why a modest extra amount — $200 a month on the example loan — can remove years from the term and tens of thousands of dollars from the total interest.
A lump sum works the same way, only sooner: money applied to principal in year one avoids interest on that amount for every remaining year of the loan, which is why early lump sums outperform the same dollars spread later. This calculator simulates the loan month by month, exactly the way the servicer does, rather than using a shortcut formula — so the payoff time and interest figures match a real amortization schedule. The tax and insurance fields change only the all-in monthly figure shown for budgeting; they never touch the payoff math.
Two checks before acting on the result. First, tell your servicer in writing that extra money goes to principal, not to future payments — the default handling varies. Second, confirm your loan has no prepayment penalty, and weigh the certain math of avoided interest against your other priorities: an emergency fund and any higher-rate debt usually come first. This is an educational estimate, not financial advice — but as a way to see what a habit is worth before you commit to it, the month-by-month truth beats a rule of thumb.