Loan amount: $320,000
Your accelerator — every dollar attacks the principal directly.
Standard Payment
$0
Principal & interest / mo
New Payment
$0
With extra payment
Interest Saved
$0
Over the life of the loan
Time Saved
0 mo
Off your payoff date
Loan Balance Over Time
How Overpaying Your Mortgage Accelerates FIRE
For the FIRE community, a mortgage is often the single largest expense standing between you and financial independence. Your monthly payment is fixed by an amortization formula, but the split between interest and principal is not. In the early years, most of every payment is interest. An extra payment skips that split entirely — it goes 100% to principal, immediately reducing the balance that all future interest is charged against. That's why a modest, consistent overpayment can erase years from the loan and tens of thousands in interest.
The standard monthly payment is calculated with M = P · [ r(1+r)n ] / [ (1+r)n − 1 ], where P is the loan principal, r is the monthly interest rate (APR ÷ 12), and n is the number of monthly payments. This simulator computes that baseline, then runs a full month-by-month schedule with your extra payment added on top to find the new payoff date and total interest. The difference between the two is what you keep.
Worked example: On a $320,000 loan at 6.5% over 30 years, the standard payment is about $2,023/month and you'd pay roughly $408,000 in interest. Add just $300/month and you pay the loan off in about 24 years instead of 30, saving close to $110,000 in interest — and you free up the full payment six years early, which can be redirected straight into your investment portfolio.
Frequently Asked Questions
Does paying extra on my mortgage really help me reach FIRE faster?+
Yes. Every extra dollar goes straight to principal, which shrinks the balance that future interest is charged on. This compounds over time, often eliminating years of payments and tens of thousands in interest — and once the loan is gone, your entire former payment becomes free cash flow, a core lever for early retirement.
Should I overpay my mortgage or invest the money instead?+
It depends on your mortgage rate versus expected investment returns and your risk tolerance. Overpaying gives a guaranteed, tax-free return equal to your interest rate; investing may earn more but carries market risk. A low rate usually favours investing, while a high rate favours paying down debt. Many in the FIRE community do a bit of both.
How is the interest saved calculated?+
The simulator builds a full month-by-month amortization schedule for both scenarios — the standard payment, and the standard payment plus your extra amount. It sums the interest portion of every payment in each, and the difference between the two totals is your interest saved.