The savings depend on your loan balance, interest rate, and how much extra you pay. For example, adding $200 per month to a $300,000 mortgage at 6.38% can save you over $72,000 in interest and cut roughly 6 years off a 30-year loan. Use the calculator above to see your exact savings.

It depends on your financial situation. Extra mortgage payments offer a guaranteed return equal to your interest rate with zero risk. If your mortgage rate is 6% or higher, paying it down is a strong choice. However, if you have high-interest debt like credit cards, pay those off first. Consider maxing out tax-advantaged retirement accounts before making extra mortgage payments.

Both approaches reduce your balance and save interest, but monthly extra payments typically work better for most people because they build a consistent habit and reduce your principal steadily throughout the year. A lump sum payment is effective if you receive a bonus or inheritance. The key factor is timing: the earlier you make extra payments, the more interest you save.

Yes, when you make an extra payment and specify it as a principal-only payment, the entire amount goes toward reducing your loan balance. This is different from your regular payment, which splits between principal and interest. Always confirm with your lender that extra payments are applied to principal, not future payments.

Most modern mortgages do not have prepayment penalties. FHA loans, VA loans, and loans from federally chartered credit unions prohibit prepayment penalties by law. However, some conventional loans may include a penalty during the first 3 to 5 years. Check your loan agreement or ask your lender before making large extra payments.

Instead of making 12 monthly payments per year, you pay half your monthly amount every two weeks. Since there are 52 weeks in a year, this results in 26 half-payments, which equals 13 full monthly payments. That one extra payment per year can shave several years off your mortgage and save thousands in interest.