Mortgage Payoff Guide
Paying off your mortgage faster is one of the most powerful financial moves you can make. Learn strategies that could save you tens of thousands of dollars.
The Power of Extra Payments
Most of your early mortgage payments go toward interest, not principal. On a standard 30-year mortgage, you pay more in interest over the life of the loan than the home originally cost. Even small extra payments early on dramatically reduce your total interest paid.
$100/mo extra
~$44,000
saved + paid off 4 years early
$200/mo extra
~$80,000
saved + paid off 6 years early
$500/mo extra
~$140,000
saved + paid off 11 years early
Based on a $400,000 30-year fixed mortgage at 6.75%
In-Depth Guides
Frequently Asked Questions
Does paying extra on my mortgage really make a difference?
Yes — significantly. On a $400,000 30-year mortgage at 6.75%, paying just $200 extra per month saves over $80,000 in interest and pays off the loan 6 years early.
Should I pay off my mortgage early or invest?
This depends on your mortgage rate vs. expected investment returns, your risk tolerance, and your tax situation. Paying off a 7% mortgage is a guaranteed 7% return. Historically, stock market returns average ~10% annually — but are not guaranteed. Many financial advisors suggest a balanced approach.
What is mortgage recasting?
Recasting (or re-amortization) lets you make a large lump-sum principal payment and have your lender re-calculate your monthly payment based on the new, lower balance. Unlike refinancing, there are no closing costs — just a small fee (usually $200–$500).
Do extra payments go toward principal or interest?
If you specify the payment as a principal reduction, extra payments go entirely to your loan balance. Make sure to clearly mark extra payments as "apply to principal" to avoid them being applied to future payments instead.
Use our payoff calculator
See exactly how much extra payments would save you.
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