Mortgage Interest Adds Up — In the following example, making one additional loan payment every year will pay off a 30 year loan in 21¼ years, saving the household $42,457 even after accounting for interest tax deductions (discussed in the Guide). Note: Instead of making one additional payment each year, you can also just make an extra one-twelfth of a payment each month. Compare ($80,000 loan at 10% with 30 year term): Making mortgage payments: Pay off in 21¼ years Pay off in 30 years Total Monthly Payments ($702 per month) 179,010 252,720 1 extra payment ($702) per year or about $58 each month 14,742 0 Equals: Total payments on Mortgage 193,752 252,720 . . . Interest paid on mortgage1 113,752 172,720 Savings from tax deductions (28%) (31,850) (48,361) Equals: Actual Cost of Mortgage 81,902 124,359 The difference between $124,359 and $81,902 is $42,457 (this is the amount saved by paying off the loan early). The Guide provides further examples of how to compare mortgage savings versus other investment returns such as mutual funds, savings accounts, etc. 1 Determined by subtracting the original loan amount ($80,000) from the total payments made to the lender. The difference is interest paid.