Paying off your mortgage faster doesn’t have to be complicated. Even small additional payments toward principal can shorten your loan and lower the total interest you pay over its life.
Why extra principal payments matter
Each regular mortgage payment covers interest first and then reduces your principal balance. When you pay extra toward principal, your balance drops sooner, so less interest builds up in the months and years that follow.
Ways to pay extra
- Monthly: add a set amount, such as an extra $100, to each payment.
- Yearly: make one additional payment each year, for example from a bonus or tax refund.
- One-time: put a lump sum toward your balance when you have it.
Before you start
- 1Check with your loan servicer that extra money is applied to principal, not to a future payment.
- 2Ask whether your loan has any prepayment penalty.
- 3Keep an emergency fund in place so extra payments don’t leave you short.
- 4Compare paying down your mortgage with your other goals, such as retirement savings or paying off higher-interest debt.
Track your progress
Compare your current payoff date with your adjusted timeline, and note milestones like reaching 50% paid. Your Loan Payment Tracker and Home Equity Tracker can help you see the full picture.
For advice on your own situation, talk with your lender or a financial advisor.
Ready to take the next step?
Create a free account and activate your real estate benefits.
