Many homeowners focus on securing a great mortgage, but prepayment strategies can significantly impact your financial future. Paying extra toward your mortgage can reduce interest costs and help you build equity faster.

How Prepayment Works

Prepayment means making additional payments toward your mortgage principal. This can be done through:

• Lump-sum payments: A one-time extra payment toward your loan.
• Increased monthly payments: Adding a little extra to each mortgage payment.
• Biweekly payments: Making half-payments every two weeks instead of one monthly payment.

Benefits of Prepaying Your Mortgage

• Interest Savings: Even small extra payments can significantly reduce total interest costs.
• Faster Equity Growth: The more you pay down your principal, the more ownership you gain.
• Shortened Loan Term: You can pay off your mortgage years earlier than scheduled.

Is Prepayment Right for You?

While prepayment has major benefits, it’s essential to check for prepayment penalties and ensure it aligns with your financial goals. If you have high-interest debt or investment opportunities, it may be better to prioritize those before paying off your mortgage early.