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When does a mortgage start paying more principal than interest?

28 August 2026 · 5 min read

Later than almost anyone expects. On a $400,000 mortgage at 6.5% over 30 years, the month where your payment finally puts more toward the balance than toward interest is month 233 — nineteen years and five months in.

Why it takes so long

Every payment is split the same way. Interest is charged on whatever you still owe; whatever is left of the payment reduces the balance. At the start you owe almost the whole loan, so interest eats almost the whole payment.

On that $400,000 loan the monthly payment is $2,528.27. The very first one splits $2,167 to interest and $362 to principal — about 86% of the money you send does nothing to what you owe. The balance falls by $362, so next month's interest is fractionally lower and the principal share is fractionally higher. That's the whole mechanism: it shifts by a few dollars a month, and it takes nineteen years for those few dollars to add up to a reversal.

The date depends almost entirely on your rate

Same loan, same term, different rates:

Three points of rate move the crossover by more than five years. A higher rate doesn't just cost more each month — it keeps a larger share of every payment locked in the interest column for longer, which is why high-rate loans feel like they never move.

The term matters more than anything else

Keep the rate at 6.5% and change only the term:

That's the honest version of the "15-year mortgages save you money" claim. It isn't a better rate doing the work — it's that a larger payment against the same balance clears principal faster, which shrinks the interest charge faster, which frees up more of the next payment. Paying $956 extra a month voluntarily on the 30-year gets you to nearly the same place.

Does the crossover date actually matter?

Not on its own. It's a milestone, not a mechanism — nothing changes about your loan on month 233, and paying it off faster isn't about reaching that date sooner. Two things it's genuinely useful for:

• Understanding why early overpayments are worth so much more. A dollar of principal paid in year one removes twenty-nine years of interest on that dollar. The same dollar in year twenty-five removes five. That's not a small difference, and the crossover chart is what makes it visible.
• Setting expectations about equity. If you plan to sell in year seven, you'll have paid roughly $200,000 to the lender and reduced the balance by a fraction of it. Most of your equity at that point comes from your deposit and from the house's price, not from the payments.

What actually moves it

Only one thing shifts the crossover meaningfully: putting more money against principal, earlier. Extra payments, a shorter term, or a lower rate through refinancing — all of them work by the same mechanism, which is reducing the balance the interest is charged on.

What doesn't move it: paying on a different day of the month, rounding your payment up by a few dollars, or any of the schemes that charge a fee to "optimise" your payment timing. The maths only responds to principal.

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