Should you pay off your mortgage early?
Last updated November 9, 2026
Extra mortgage payments can cut years off your loan and tens of thousands of dollars in interest. They also lock money into your home. Both sides are worth weighing.
What extra payments can save
Consider a $300,000 loan at 6.5% over 30 years. The principal and interest payment is about $1,896, and total interest is about $382,600. Adding a fixed extra amount each month changes things a lot:
| Extra each month | Paid off in about | Interest saved |
|---|---|---|
| $0 | 30 years | — |
| $100 | 26 years | $61,000 |
| $200 | 23 years 1 month | $103,000 |
| $500 | 17 years 6 months | $180,000 |
Early extra payments save the most because they reduce the balance that interest is charged on for decades.
Reasons people pay down a mortgage
- A guaranteed return equal to the loan's rate.
- Lower monthly obligations after payoff, which can help at retirement.
- Peace of mind from owning the home outright.
Reasons people hold off
- Cash is hard to get back out. Home equity cannot pay an unexpected bill without selling or borrowing.
- Other debts cost more. A mortgage is often the lowest rate you have, so cards and personal loans usually come first.
- Retirement savings. Employer matches and tax-advantaged accounts may be worth filling first.
- Low fixed rate. If your rate is low, you may prefer to keep it.
Practical points
- Tell your servicer that extra money should go to principal.
- Check your loan for a prepayment penalty. They are uncommon, but they exist.
- If you pay private mortgage insurance, ask how it can be removed. Reaching a certain amount of equity can end it.
- Mortgage interest is only deductible for people who itemize, and rules change. A tax professional can help.
Where the mortgage fits in your plan
Enter principal and interest only. Do not include taxes or insurance. The planner will show how the mortgage ranks beside your other debts.
Run your own numbers
Enter your balances, rates and payments to see which debt to pay first and when you could be debt-free.
Related guides
- How to pay off debt faster
- Debt snowball vs. avalanche: which one is better?
- The real cost of paying only the minimum
This article is for education only and is not financial, tax or legal advice. Examples use simplified monthly interest and assume on-time payments with no new borrowing.