An extra $100 per month on a $500K loan saves $57,744 in interest. An extra $1,000 cuts the loan term nearly in half. Here's the maths.

The Power of Paying More Than the Minimum

Most people have never even considered paying more than the minimum on their mortgage. But the impact is significant, and it works in three ways at once:

It reduces the balance of the loan
It reduces the amount of interest in your next payment
It increases the amount of principal in your next payment

One extra payment triggers a compounding benefit that accelerates over time.

The Numbers

On a $500,000 loan at 6% over 30 years:

Extra $100 per month: Loan paid off 2.5 years early. Interest saved: $57,744.

Extra $1,000 per month: Loan paid off in 16.4 years instead of 30. Interest saved: $292,909.

Combine Strategies for Maximum Impact

What happens when you combine fortnightly repayments with extra payments? On the same $500,000 loan:

Minimum fortnightly: Paid off in 24.4 years, saving $128,180 in interest.

Fortnightly plus $50 extra: Paid off in 22.7 years, saving $164,730 in interest.

These aren't life-altering amounts to find each fortnight. Skip one takeaway coffee per day. Cancel one subscription you forgot about. Small amounts compound into massive savings over the life of your loan.

The Key Principle

Interest is calculated daily. The sooner you reduce the loan balance, the less interest you pay. The more you can reduce it by, the less interest you pay. Every extra dollar, paid as early as possible, works harder than you think.