What €100 extra a month does to a €300,000 mortgage
Add €100 a month to the repayments on a €300,000 mortgage at 4% over 30 years and you save €28,747 in interest, finishing the loan 3 years 6 months early. The €100 doesn’t disappear into the bank’s pocket. It goes straight against the balance you owe, which means all the interest that balance would otherwise have earned over the rest of the loan simply never gets charged.
The scenario
The base mortgage is €300,000 at 4% over 30 years, with a scheduled monthly repayment of €1,432.25. From month one, an extra €100 goes on top of every payment, so €1,532.25 leaves your account each month instead.
What changes
| Base mortgage | Overpaying €100 | Overpaying €200 | |
|---|---|---|---|
| Interest saved | – | €28,747 | €50,412 |
| Time saved | – | 3 years 6 months | 6 years 2 months |
| Payoff | 30 years | 26 years 6 months | 23 years 10 months |
Doubling the overpayment doesn’t quite double the saving: €200 a month buys almost twice the interest saving of €100 a month, but not more than twice, because the second €100 is doing the same work slightly later in the loan.
Where the saving comes from
A mortgage charges interest on whatever balance is still outstanding. Every extra euro you pay off early is a euro that stops being charged interest for every remaining month of the loan. An overpayment made in year one saves more interest than the same overpayment made in year twenty, because the early euro would otherwise have sat on the books, accruing interest, for far longer. This is also why the interest saved from overpaying isn’t a fixed multiple of what you put in: it depends on how early you make the overpayment and how long the loan still has to run. Amortisation schedules already show this pattern in the base loan — in year one, €11,904 of the €17,187 paid is interest and only €5,283 is principal, a split that only tips in the borrower’s favour as the balance falls, with €236,352 still owed after 10 years and €141,463 after 20.
What this example is really showing
An overpayment is a guaranteed, tax-free return equal to your mortgage rate. There’s no investment on offer that promises 4% with zero risk, yet that is effectively what you get by paying down debt that costs you 4%. The trade-off is access: once the €100 goes into the mortgage, it’s in the house, not in your current account, and getting it back out means selling or remortgaging rather than making a withdrawal. One caveat: fixed-rate mortgages often cap how much you can overpay each year without a penalty, so check your terms before committing to a regular extra payment.
Try your own numbers
The mortgage calculator’s overpayment field runs exactly this comparison for your own balance, rate and term, showing the interest saved and the time cut for whatever extra amount you’re considering.
Figures assume a €300,000 mortgage at a fixed 4% interest rate over a 30-year term, with overpayments applied consistently from month one and no other changes to the rate or term.