The Annual Cost of Minimum-Only Payments
Annual interest cost and 25-year total interest at minimum payments by mortgage balance and rate
| Balance | Rate | Annual Interest (Year 1) | Annual Interest (Year 10) | Total 25-Year Interest |
|---|---|---|---|---|
| $200,000 | 6.0% | $11,901 | $9,800 | $169,920 |
| $250,000 | 6.5% | $16,100 | $13,200 | $238,150 |
| $300,000 | 7.0% | $20,850 | $17,100 | $313,700 |
| $350,000 | 7.0% | $24,330 | $19,950 | $365,700 |
| $400,000 | 7.5% | $29,700 | $24,300 | $449,100 |
On a $300,000 mortgage at 7%, $200/month extra saves $61,000 in total interest. Alternatively, $200/month invested at 7% for 25 years = $158,000. The extra payment 'saves' $61,000; the investment 'earns' $158,000. But the extra payment is guaranteed; the investment is not. The comparison isn’t free money vs. free money — it’s guaranteed savings vs. expected gains.
Interest Saved by Starting Early vs. Late
Interest savings from $200/month extra payment started at different points in 30-year mortgage
| Start Extra Payments | Remaining Term | Years Saved | Interest Saved ($300K/7%/$200/mo) |
|---|---|---|---|
| Year 1 of loan | 30 years remaining | 5.5 years | $80,000+ |
| Year 5 of loan | 25 years remaining | 4.5 years | $61,000 |
| Year 10 of loan | 20 years remaining | 3.5 years | $40,000 |
| Year 15 of loan | 15 years remaining | 2.5 years | $24,000 |
| Year 20 of loan | 10 years remaining | 1.5 years | $9,000 |
Starting extra payments at year 1 vs. year 10 of the same mortgage saves an additional $21,000 in interest — due to the longer compounding window in early-start scenarios. Each year of delay costs approximately $2,000–$4,000 in foregone interest savings on a typical mid-size mortgage.
Calculate What Waiting to Start Has Cost You
Enter your current balance (not original loan amount) to see what your remaining interest savings are — and what starting earlier would have saved.