1. What is Mortgage Amortization?

Mortgage amortization is the process of paying off a loan with regular payments over time. Each payment covers both interest and principal, with the interest portion decreasing and principal portion increasing over the life of the loan.

2. How Extra Payments Affect Your Mortgage

Extra payments directly reduce the principal balance of your loan, which:

• Reduces the total interest paid over the life of the loan
• Shortens the loan term
• Builds equity faster

3. Benefits of Extra Payments

Key Benefits: Even small extra payments can save thousands in interest and shave years off your mortgage. The earlier you make extra payments, the greater the impact.

4. Using the Calculator

Instructions: Enter your loan details and any planned extra payment. The calculator will show your amortization schedule and total savings from extra payments.

5. Frequently Asked Questions (FAQ)

Q1: How much can I save with extra payments?
A: Savings depend on loan amount, rate, term, and extra payment amount. Even $50/month can save thousands.

Q2: Should I pay extra principal or refinance?
A: Depends on your rate and goals. Extra payments work well when rates are low; refinancing may be better if rates drop significantly.

Q3: Are there prepayment penalties?
A: Most modern mortgages don't have them, but check your loan terms.

Q4: When is the best time to make extra payments?
A: Early in the loan term when interest costs are highest.

Q5: How do I make sure extra goes to principal?
A: Specify "for principal reduction" with your payment and verify with lender.