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Can You Make Principal-Only Payments on Your Mortgage?

Learn how making principal-only payments on your mortgage can reduce interest and shorten your loan term. Confirm procedures with your lender.

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Video transcript

Yes, you can typically make principal-only payments on your mortgage. Contact your lender to confirm and understand their specific procedures. By making these payments, you reduce the principal balance faster, thereby saving on interest over the life of the loan. Ensure to specify that the extra payment is for the principal, and verify it is applied correctly to avoid any confusion.

Questions and answers

  1. What are principal-only mortgage payments?

    Principal-only payments are extra payments applied directly to reduce the loan’s principal balance without affecting the interest portion.

  2. How do principal-only payments save me money?

    By reducing the principal faster, you lower the total interest accrued over the life of the loan, potentially shortening your mortgage term.

  3. How can I make sure my extra payments go toward the principal?

    Contact your lender in advance and specify that your extra payments should be applied to the principal to avoid confusion.

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For more insights on managing your mortgage effectively, check out our videos on refinancing options, prepayment strategies, and understanding mortgage interest. These resources can help you save more and pay off your home sooner.