Frequently Asked Questions
How much interest can I save by making extra mortgage payments?
The amount depends on your loan balance, interest rate, term, and how much extra you pay. On a $350,000 loan at 6.5% over 30 years, an extra $200/month saves approximately $100,000 in interest and pays off the loan 8 years early.
Do I need to tell my lender I'm making extra payments?
You should verify that your lender applies extra payments to principal (not future interest). Most modern loans handle this automatically when you pay above the minimum, but some require you to specify "principal only" online or by phone.
Should I pay off my mortgage early or invest the extra money?
If your mortgage rate is 6%+, paying it down is a guaranteed, risk-free return equal to your rate. The stock market historically returns 7-10%, but with volatility. Many advisors recommend: emergency fund first, retirement accounts second, then split extra money between debt and investments based on your risk tolerance.
Is the calculator accurate for my specific loan?
We use standard fixed-rate amortization formulas identical to what your lender uses. Results match to the penny for conventional fixed-rate mortgages. For ARMs, interest-only loans, or loans with prepayment penalties, consult your lender directly.
Are there downsides to paying off my mortgage early?
Potential downsides include reduced liquidity, opportunity cost if investments could outperform your mortgage rate, and (rarely) prepayment penalties. Most conventional loans have no prepayment penalty.
Does paying extra change my monthly payment?
No. Making extra principal payments does not lower your required monthly payment. What changes is your payoff date and total interest paid. Your minimum payment stays the same until the loan is fully paid off.
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