What is the extra payment method?
The extra payment method is the most popular early mortgage payoff strategy because it is simple, requires no new debt, and is fully reversible. You add a chosen amount to your monthly payment, instruct your servicer to apply it to principal, and the extra dollars compound into massive interest savings over the life of the loan.
Step-by-step: How do I start the extra payment method today?
- Confirm there is no prepayment penalty. Check page 1 of your closing disclosure or call your servicer.
- Pick an extra amount you can sustain. Start with $50-$100 if you are unsure, $200-$500 if you have room.
- Log into your servicer\'s portal. Find the "Make a Payment" page. Look for "Principal Only" or "Extra Principal" option.
- Set it up as a recurring transfer. Auto-paid extras work better than manual payments because they survive willpower lapses.
- Verify on your next statement. Make sure the extra was applied to principal, not credited as a future regular payment.
How much can the extra payment method save?
Below are real numbers on a $320,000, 30-year, 6.5% mortgage:
- $50/month extra: $24K saved · 22 months earlier payoff
- $200/month extra: $73K saved · 5y 2mo earlier payoff
- $500/month extra: $130K saved · 10y 4mo earlier payoff
Use our Extra Payment Calculator to model your specific loan.
Where should I find the extra cash?
Common sources successful homeowners tap: a paid-off car loan ($300-$500/mo freed up), a recent raise (apply 50% to mortgage), reducing one streaming or subscription service, and downgrading a vacation by $1,000 once a year.
What are the downsides of the extra payment method?
The main downside is opportunity cost: dollars locked in home equity are not earning investment returns and are not liquid in an emergency. Best practice: keep 6 months of expenses in liquid savings, prioritize 401(k) match, and only then aggressively prepay.