Should You Make Extra Mortgage Payments? What to Know

Paying Down Your Mortgage Faster

For many homeowners, making an extra mortgage payment here and there seems like a smart move—and in many cases, it is. Paying a little more toward your principal can shorten the life of your loan and reduce the total amount of interest paid.

But before you start sending in extra payments, it’s important to understand how it works, what your options are, and whether it’s the right fit for your financial goals.

How Extra Payments Help

Your monthly mortgage payment is split between principal (what you borrowed) and interest (what you pay to borrow it). In the early years of your loan, most of your payment goes toward interest.

When you make extra payments—especially if you direct them toward principal—you reduce your balance faster. That means less interest accrues over time, and you may pay off your loan years earlier than scheduled.

One Extra Payment a Year Adds Up

One of the simplest strategies is to make one full extra payment per year. This can be done all at once—like applying a tax refund—or by dividing that extra payment by 12 and adding a little extra to each month.

This small change can shave several years off a 30-year mortgage and save thousands in interest.

Biweekly Payments Explained

Another method is to set up biweekly payments instead of monthly. You pay half your monthly amount every two weeks. Since there are 52 weeks in a year, this results in 26 half-payments—or 13 full payments annually.

Over time, that extra payment each year can make a big difference. Check with your lender or servicer before starting a biweekly plan—some offer official programs, while others allow you to manage it manually.

Things to Consider First

Before making extra payments, make sure your mortgage doesn’t have prepayment penalties. Most loans today don’t, but it’s worth confirming.

Also, ensure any extra amount is clearly marked as “principal only” when you submit the payment. Otherwise, it might just be applied to your next month’s interest, which doesn’t help in the long run.

And remember: building an emergency fund, paying off higher-interest debt, or contributing to retirement accounts might take priority depending on your financial situation. Extra mortgage payments are best when they fit into a larger financial strategy.

Final Thoughts

Making extra payments on your mortgage can be a great way to build equity faster and reduce long-term interest—but it’s not a one-size-fits-all decision. Understanding the options and how they align with your goals is key.

Have questions about your current mortgage or want to explore payoff strategies? A quick conversation with your mortgage advisor can help you make an informed decision.