Mortgage tips
How to Pay Off Your Mortgage Faster
Small, consistent overpayments applied to principal reduce future interest and can shave years off your loan—without refinancing.
Pay Off Your Mortgage Faster with Small Overpayments
Adding even modest amounts to your mortgage payment each month can cut years off your loan term and save tens of thousands in interest.
How It Works
Interest is calculated on your remaining principal. Paying extra directly to principal lowers your balance faster, reducing future interest. The earlier and more consistently you add to principal, the greater your savings.
- Round up each payment (e.g., $1,896 → $2,000)
- Add a fixed monthly amount ($100 or $250)
- Make one extra full payment per year
- Apply tax refunds or bonuses toward principal
Interactive Calculator
For illustration only. Verify with your lender before making extra payments.
Why Does This Work?
Every mortgage payment includes interest and principal. At the beginning of your loan, most of your payment goes toward interest, with only a small amount reducing the principal balance. As the balance shrinks, less interest accrues—and more of each payment chips away at the principal. When you make additional payments toward principal, you accelerate this process, effectively skipping ahead in your amortization schedule. This compounds over time, shaving off years from your loan term.
- Interest savings: Every extra dollar applied to principal avoids future interest on that amount.
- Earlier freedom: Reduced balance means faster equity growth and quicker payoff.
- Psychological boost: Watching your loan balance fall more rapidly can motivate consistent contributions.
Simply put, overpaying lets you build equity faster and pay significantly less interest—without changing your loan terms or refinancing.
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