You can mimic this technique using an additional monthly payment by adding 1/12th of what you currently pay. At the end of each year, you will have made an additional monthвЂ™s worth of contributions to your mortgage. Bi-weekly payments: You can also make mortgage payments every other week by asking if your lender can receive bi-weekly payments or by signing up for a third-party service (make sure to check for hidden fees).Lump-sum payments may include a prepayment penalty, so you should check with your lender for any associated fees with this method. This can help you save more on interest than if you paid the same amount as accelerated payments. Lump-sum payment: Instead of adding to your monthly payments, you may want to pay one large lump-sum towards your principal balance.This process is called accelerated amortization and is one of the easiest ways to pay off your mortgage early. Essentially, you are вЂњbuyingвЂќ more of your house each month, and since you owe less on your mortgage, you will pay less interest. By adding even a small amount to your monthly payment and applying it to your principal balance, 100% of that addition is converted into equity in your home. Otherwise, the lender may apply the payments to future interest payments and you will not save on the interest cost from your principal balance. When making additional payments, make sure to specify to your lender that the payments should be applied to your loan principal. You can use a mortgage amortization calculator to see how this changes over time. Your interest expense for each month is fixed, so the rest of your payment is used to pay off the principal balance. Not only are you paying back the principal amount of your mortgage, but you are also paying off the interest expense of your mortgage for that month. Over the lifetime of your mortgage, each monthly payment consists of 2 portions. Make sure to check with your mortgage lender before trying to make prepayments as there may be penalties attached. By using the graph, you can compare the values of the mortgage with different payments at any point in time.Дepending on your mortgage contract, there may be some limitations when making additional monthly payments on your mortgage. The Early Mortgage Payoff graph compares your old and new amortization schedule to show the impact of your additional payments.

Early payoff mortgage calculator