Why extra payments are so powerful
Every extra dollar you pay goes 100% toward principal. Because interest is calculated on the remaining balance, reducing principal early means every future month has a smaller interest charge. This compounding effect means even modest extra payments can save tens of thousands over the life of a loan.
Strategies for paying off your mortgage early
Extra monthly payments: Add a fixed amount each month. Even $100–$200/month adds up significantly over time.
Bi-weekly payments: Pay half your monthly payment every two weeks. This naturally results in 13 full payments per year instead of 12 — one extra payment annually at no extra effort.
Annual lump sum: Put windfalls (tax refunds, bonuses) directly toward principal once a year.
Should you pay extra or invest instead?
If your mortgage rate is below your expected investment return, investing wins mathematically. But paying down your mortgage offers a guaranteed, risk-free return equal to your interest rate. Many homeowners split the difference — especially once higher-rate debt is paid off. Use our investment calculator to compare both scenarios.