How Much Does One Extra Mortgage Payment a Year Save?
Updated June 2026 · Educational guide, not financial advice
Making one extra mortgage payment a year — a "13th payment" — typically shaves roughly four to six years off a 30-year loan and can save tens of thousands of dollars in interest, because every extra dollar goes straight to principal and stops future interest from building. On a typical loan that often works out to somewhere between $40,000 and $100,000 saved, depending on your balance and rate.
What "one extra payment a year" actually means
A standard mortgage has you making 12 payments a year. The idea here is simple: make the equivalent of one more — a 13th payment — every 12 months, with that extra money applied to your principal balance. You can do that as a single lump sum once a year, by spreading it across the year in small monthly add-ons, or by switching to a biweekly schedule that quietly produces the same result.
It works because of how amortization is built. Early in a 30-year loan, most of each payment goes to interest and only a sliver chips away at the balance. When you send extra money to principal, you skip the interest that balance would have generated for the entire remaining life of the loan. The earlier in the loan you start, the more dramatic the effect — though it still helps at any point.
A worked example: $350,000 at 6.5%
Say you take out a $350,000 loan on a 30-year fixed mortgage at 6.5%. Your principal-and-interest payment is about $2,212 a month. If you make only the required payments, you'll pay roughly $446,000 in interest over the full 30 years.
Now add the equivalent of one extra payment each year. The cleanest way to picture it is dividing that $2,212 by 12 and adding about $184 to every monthly payment. Here's what changes:
- You pay the loan off in about 24 years and 2 months instead of 30 — roughly 5 years and 10 months early.
- Total interest drops to about $344,600.
- That's roughly $101,800 in interest saved over the life of the loan.
Your savings scale with your numbers. A bigger balance, a higher rate, or starting earlier all push the savings up; a smaller or older loan brings them down. The pattern, though, holds across the board: one extra payment a year usually trims four to six years and a meaningful five-figure sum. You can model your own exact figures with an extra payment mortgage calculator and see the new payoff date side by side with your current one.
Three easy ways to make it happen
1. Split it across 12 months
The most painless approach is to divide one monthly payment by 12 and add that amount to each month's check. In the example above, that's about $184 extra a month — small enough that it often doesn't sting, but it adds up to a full 13th payment by year's end. Just confirm with your servicer that the extra amount is applied to principal, not parked as a prepayment of next month's bill. Many online payment portals have a separate "additional principal" field for exactly this.
2. Pay a lump sum from a refund or bonus
If a fixed monthly add-on feels tight, you can make one annual lump-sum payment instead — a natural fit for a tax refund, a year-end bonus, or any windfall. The average federal tax refund runs around $3,000, which is in the neighborhood of a full mortgage payment for many borrowers. One caveat: a once-a-year lump applied in, say, April saves slightly less than spreading the same money across all 12 months, because the spread-out version reduces your balance a little sooner each month. The difference is usually minor, so the "best" method is mostly whichever one you'll actually stick with.
3. Set up biweekly payments
Instead of 12 monthly payments, you pay half your monthly amount every two weeks. Because there are 52 weeks in a year, you make 26 half-payments — which equals 13 full payments — without ever writing a check that feels bigger. It's the "extra payment a year" strategy on autopilot. A biweekly mortgage calculator shows how your specific loan responds. One thing to watch: if your lender charges a fee to enroll in a formal biweekly program, or only forwards the extra money to your loan once a quarter, you may do better simply scheduling the half-payments yourself or using the 1/12 method.
Things worth checking first
Before you commit, a few practical points can affect whether this is the right move for you:
- Prepayment penalties. Most modern conforming mortgages don't have them, but it's worth confirming in your loan documents that paying ahead won't trigger a charge.
- Where the money lands. An extra payment only delivers these savings if it's applied to principal. Check your statement after the first one to make sure it reduced your balance.
- Your wider finances. If you're carrying higher-interest debt like credit cards, or you don't yet have an emergency fund, those generally come first — this is a trade-off, not a one-size-fits-all rule. Some people also prefer to keep cash invested rather than locked in home equity.
- Recasting vs. payoff. Extra payments shorten your term but don't lower your required monthly payment. If you want a lower monthly bill instead, ask your servicer about a recast.
To see exactly where you stand today, you can check how many years are left on your loan with a mortgage balance calculator, or download a full month-by-month amortization schedule to Excel or PDF and watch your payoff date move as you add the extra payments.
Key takeaways
- One extra mortgage payment a year — a 13th payment toward principal — usually shaves about four to six years off a 30-year loan.
- On a $350,000 loan at 6.5%, adding roughly $184 a month saves about $101,800 in interest and pays the loan off nearly six years early.
- You can do it three easy ways: split one payment across 12 months (~1/12 extra each month), make a yearly lump sum from a refund or bonus, or switch to biweekly payments.
- Make sure the extra money is applied to principal, and check for any prepayment penalty or biweekly enrollment fee first.
- The bigger your balance and rate — and the earlier you start — the more you save, so run your own numbers before deciding.