THE FIELD GUIDE · MORTGAGE PLANNING
Watch the balance fall
Understand what an extra principal payment changes.
How amortization works
Each scheduled payment covers interest for that month and repays some principal. With a fixed rate and level scheduled payment, the interest portion generally falls as the balance declines. Taxes, insurance and other ownership expenses do not repay principal.
Extra principal changes the timeline
An additional monthly amount can repay the loan earlier and reduce modeled interest. Our schedule limits the final principal payment to the remaining balance, avoiding a fictional overpayment.
Confirm how the servicer applies it
Check whether extra funds will be applied to principal and whether your loan has a prepayment penalty or other conditions. Extra payments do not necessarily lower the required next payment or trigger a recast.
Compare the opportunity cost
Cash used for principal is no longer available for reserves or other goals. The model does not assess your taxes, alternative returns or personal financial priorities.
This guide is educational. Confirm the figures and conditions for your actual loan.
Official consumer or market guidance ↗