The Mortgage Lab
How a home loan really works — and the quiet superpower of paying a little extra every month. Slide the numbers around and watch what happens.
1️⃣ The loan
The bank says: pay every month
$2,684
for 30 yrs — that's $966,279 in total for a $500,000 house
2️⃣ Your very first payment — where does it go?
Interest is the bank's fee for lending you the money, charged on whatever you still owe. At the start you owe the most — so the bank takes the biggest bite.
Of your first $2,684 payment, only $601 actually pays off your home. The other $2,083 is interest.
Every payment, split — for the whole loan:
Extra payments skip the queue: 100% of an extra dollar goes straight to your home — none of it is interest. Tap the buttons above and watch the green take over sooner.
3️⃣ The race to $0 — add a little extra
Three what-ifs, on top of the required $2,684. Change them to anything you like.
What you still owe, year by year. The dashed grey line is the "just pay the minimum" path.
+$100/mo
$42,599
interest you never pay
🎉 2 yrs 4 mo sooner
paid off in 27 yrs 8 mo instead of 30 yrs
+$250/mo
$92,673
interest you never pay
🎉 5 yrs 2 mo sooner
paid off in 24 yrs 10 mo instead of 30 yrs
+$500/mo
$152,901
interest you never pay
🎉 8 yrs 8 mo sooner
paid off in 21 yrs 4 mo instead of 30 yrs
4️⃣ What the house really costs
The price tag is only part of the story — the longer you take, the more the bank's slice grows.
🏠
Principal
The money you actually borrowed. Every dollar of principal you pay off, you own more of your home.
🏦
Interest
The bank's fee for the loan — a percentage of what you still owe, charged every month. Owe less, pay less.
⚡
Extra payments
Anything above the required payment goes 100% to principal. That shrinks next month's interest — and it snowballs.