The True Cost of Minimum Payments
True total cost of minimum payments on 30-year fixed mortgages at 2025 rates
| Loan Amount | Rate | Monthly P&I | Total Interest (30yr) | Total Cost (balance + interest) |
|---|---|---|---|---|
| $200,000 | 6.0% | $1,199 | $231,676 | $431,676 |
| $250,000 | 6.5% | $1,580 | $319,026 | $569,026 |
| $300,000 | 7.0% | $1,996 | $418,527 | $718,527 |
| $400,000 | 7.0% | $2,661 | $558,036 | $958,036 |
| $500,000 | 7.0% | $3,327 | $697,545 | $1,197,545 |
A $300,000 mortgage at 7% on a 30-year term costs $418,527 in total interest — 139% of the original loan amount. You pay for the home twice. Every extra payment reduces this enormous interest burden.
How Extra Payments Change the Lifetime Picture
Impact of extra payments on total lifetime mortgage cost — $300,000 at 7%
| Extra Payment | Total Interest on $300K/7% | Total Paid | Saved vs. Minimum |
|---|---|---|---|
| $0 (minimum only) | $418,527 | $718,527 | — |
| $100/month extra | $383,000 | $683,000 | $35,500 saved |
| $200/month extra | $350,000 | $650,000 | $68,500 saved |
| $300/month extra | $318,000 | $618,000 | $100,527 saved |
| $500/month extra | $265,000 | $565,000 | $153,527 saved |
| $800/month extra | $206,000 | $506,000 | $212,527 saved |
The most striking takeaway: $300/month extra on a $300,000 mortgage saves over $100,000 in total interest — reducing total cost from $718,527 to $618,000. That $100,000 in savings came from $300/month × approximately 220 months = $66,000 in extra contributions (before the loan ends early). The return: $100,000 in savings on $66,000 in extra payments = 51% return above principal on every extra dollar.
See What Minimum Payments Are Costing You
Enter your mortgage details to see total interest at minimum payments vs. your proposed extra payment amount.