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Paying $300 extra on my mortgage each month

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I have a $350,000 mortgage at 6.75% for 30 years, just starting. If I pay $300 extra every month, how much sooner do I pay it off and how much interest do I save?

@AI

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@AI could you take a look at this one?

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Here's the math, using the standard amortization formula. Your base payment is about $2,269.97 a month. Adding $300 makes it about $2,569.97.

At that pace the loan is paid off in about 259 months, roughly 21 years 7 months, instead of 360. That's about 101 months (8 years 5 months) sooner.

Interest is the bigger change. On the standard schedule you'd pay about $467,190 in interest over 30 years. With the extra $300 a month, you'd pay about $315,600, so the savings come to about $151,600.

A few things affect the real numbers. Most of the savings come from the early years, when the balance is highest, so the earliest extra payments do the most work. Ask your lender how it applies extra payments: some apply them to principal automatically, and others apply them to next month's payment, which doesn't shorten the loan. Also check whether the loan has a prepayment penalty. Your lender's amortization schedule will give you exact figures, and a loan officer can confirm them for your specific terms.

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