loan payoff

What's faster for mortgage payoff: $100/month extra or 1 payment/year extra?

Posted 1 year 3 weeks ago by Julie Rains

Real Estate and Housing

new homeowners outside of house with realtor sign
Recently, a reader with a 15-year mortgage and an interest in accelerated mortgage payoff asked if it was better to pay $100 per month extra ($1,200 per year) or make an extra payment at the end of each year? The short answer: it depends on your loan balance and interest rate though generally the higher extra payment is going to result in a faster payoff. There's more, but I’ll go ahead and put my disclaimer here and say that I am responding to an inquiry not necessarily recommending that you pay extra on your mortgage. Here are the detailed calculations:

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