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Mortgage  Question?
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How much is removed from balance if I overpay mortgage?

If I send an extra $1,000 each month with my mortgage payment, how much will be removed from the overall principal balance?

Michael Jensen, Mortgage and Finance Guru
, Mortgage and Finance Guru

Your mortgage balance is reduced by the principal component of your monthly mortgage payment and whatever extra amount you pay above your required monthly mortgage payment. For example, if your required monthly mortgage payment is $1,500, comprised on $1,000 in interest and $500 in principal, and you make a payment of $2,500, then your mortgage balance is reduced by $1,500 ($500 in principal from your required mortgage payment and $1,000 from the extra payment). If you have an interest only mortgage, then your mortgage balance is only reduced by the amount of the extra monthly payment.

Paying more than your required mortgage payment is known as accelerating your mortgage and FREEandCLEAR offers a comprehensive overview of mortgage acceleration. In addition, you can use our MORTGAGE ACCELERATION CALCULATOR to understand how making extra payments on your mortgage can reduce the term of your mortgage and save you money on interest expense.

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Data provided by Informa Research Services. Payments do not include amounts for taxes and insurance premiums. Click for more information on rates and product details.

About the author

Michael Jensen, Mortgage and Finance Guru

Michael is the co-founder of FREEandCLEAR. Michael possesses extensive knowledge about mortgages and finance and has been writing about mortgages for nearly a decade. His work has been featured in leading national and industry publications. More about Michael

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