Most homeowners don’t realize just how powerful a few extra mortgage payments can be. Whether it’s $50 a month or a lump sum once a year, these contributions can shave years off your loan and save thousands of dollars in interest. Yet many people hesitate, thinking they need to pay off their entire loan in big chunks to make any difference.
That’s simply not true.
Making consistent, small extra payments is one of the most powerful — and underrated — ways to build wealth through homeownership. This guide will show you how it works, when it makes sense, and how to get started with your own plan.
Your monthly mortgage payment includes two main parts:
In a standard 30-year fixed mortgage, you pay mostly interest in the first 10–15 years. This means only a small portion of your payment goes toward reducing your loan balance in the early years.
When you make an extra payment, it goes directly toward reducing the principal. That lowers the balance, and since interest is calculated on the remaining principal, you’ll pay less interest going forward — every month for the rest of the loan.
This compounding effect is what makes extra payments so powerful.
Let’s break it down with a real-world example.
Scenario:
Now let’s look at what happens if you make extra payments:
🧮 Try it yourself with the Bountisphere Mortgage Payoff Calculator
This is the easiest way to start. If your payment is $2,212, round it up to $2,300 or $2,500. Even an extra $88 adds up over time — and you likely won’t feel the difference month to month.
Instead of one full payment per month, you pay half every two weeks. This results in 26 half-payments — the equivalent of 13 full payments per year. That’s one whole extra payment annually, without a major impact on cash flow.
Pro tip: Make sure your lender supports biweekly payments without charging a fee. Otherwise, use your own calendar and make an extra monthly payment manually.
Apply part of your annual bonus or tax refund toward your mortgage principal. Even a one-time $1,000 payment early in your loan can cut months off the term.
Sold a car, received a gift, or closed a side hustle gig? Redirect part of that toward your mortgage instead of spending it.
Making an extra payment is great — but only if it’s properly applied.
Always specify “apply to principal only” when sending in an extra payment. Otherwise, some lenders may hold it for your next month’s bill or apply it to interest.
If you’re using an online mortgage portal, look for an option to split payments or label part of it as principal. If you’re unsure, call your lender directly.
This is a common question, especially if you have a higher interest rate.
Refinancing can lower your monthly payments or shorten your term (e.g. from 30 to 15 years). However, refinancing comes with closing costs and often resets your loan term.
Making extra payments:
General rule:
- If your rate is above 7%, consider refinancing and making extra payments.
- If you’re already at 5–6.5%, extra payments alone may be your best bet.
At Bountisphere, we recommend running the numbers for both — and we can help with that inside your budgeting dashboard.
Even when the math is clear, many people don’t make extra payments. Why?
This is valid. That’s why it’s important to maintain an emergency fund. But after that, remember: putting money toward your mortgage isn’t “lost.” It’s building equity.
That’s where tools like the Bountisphere Mortgage Payoff Calculator come in. Seeing real savings — like $50,000 — is a great motivator.
Sometimes that’s smart. But extra mortgage payments offer a guaranteed return equivalent to your interest rate — which is hard to beat consistently in the market.
Yes, though some lenders have restrictions. Always check your loan terms or speak with your loan servicer.
Most modern mortgages do not have prepayment penalties — but double-check your paperwork or ask your lender.
Not if you treat extra payments as “above and beyond.” You can keep your regular auto-pay and manually submit extra amounts whenever you’re able.
Not necessarily. If your 401(k) or IRA contributions are lacking, focus there first — especially if your employer offers a match.
Jen, a Bountisphere user from Arizona, decided to pay $200 extra every month on her $280,000 mortgage.
Over time, that’s saving her over $72,000 in interest and knocking 6.5 years off her loan.
“I didn’t think I could do much at first,” she says. “But $200 a month felt manageable. And now I look at the forecast in Bountisphere and it’s like — I’m doing this. I’m going to own my house way sooner than I thought.”
At Bountisphere, we believe budgeting should go beyond categories — it should reflect your full financial future. That’s why your Money Plan includes:
When you include your mortgage in your plan, we’ll show you exactly what extra payments do to your future balance. You can forecast the payoff date and decide how much faster you want to get there.
Use our free calculator to test scenarios, plug in extra payments, and visualize how fast you can be mortgage-free. You don’t need to commit to anything — just get informed.
👉 Try the Bountisphere Mortgage Payoff Calculator
A little goes a long way when it comes to mortgage freedom. Whether you’re rounding up your payment, applying your bonus, or planning a long-term strategy, every extra dollar counts.
Paying off your mortgage early isn’t just a financial win — it’s peace of mind, flexibility, and freedom. And it’s within reach.
👉 Start your Bountisphere Money Plan