1. What is Mortgage Acceleration?

Mortgage acceleration involves making extra payments toward your mortgage principal to shorten the loan term and reduce total interest paid. This strategy can save thousands of dollars and help you become mortgage-free years earlier.

2. How Does the Calculator Work?

The calculator uses mortgage acceleration formulas:

Where:

• \( Extra\ Monthly\ Payment \) — Additional amount paid toward principal each month
• \( Original\ Term \) — Initial mortgage term in months
• \( Interest\ Rate \) — Annual interest rate as percentage
• \( Loan\ Amount \) — Total mortgage amount

Explanation: The calculator determines how extra payments reduce the principal faster, recalculating the amortization schedule to find the new payoff date.

3. Benefits of Accelerated Payments

Details: Making extra payments can significantly reduce total interest costs and build equity faster. Even small additional payments can shorten your mortgage term substantially over time.

4. Using the Calculator

Tips: Enter your current mortgage details and the amount you plan to pay extra each month. Ensure all values are accurate for precise calculations.

5. Frequently Asked Questions (FAQ)

Q1: How much can I save with extra payments?
A: Savings depend on your loan amount, interest rate, and extra payment amount. Even $50-100 extra per month can save thousands in interest.

Q2: Should I pay extra or invest the money?
A: This depends on your mortgage interest rate vs. expected investment returns. Paying off high-interest debt often provides guaranteed returns.

Q3: Are there prepayment penalties?
A: Check your mortgage agreement. Most modern mortgages allow extra payments, but some may have limits or penalties for early payoff.

Q4: How do I make extra payments?
A: Contact your lender to ensure extra payments are applied to principal. Specify "for principal reduction only" when making payments.

Q5: Is bi-weekly payment better than monthly extra?
A: Bi-weekly payments result in one extra monthly payment per year, which can be effective, but direct principal payments offer more control.