Can I make extra payments on my loan?

You can always make extra payments on your loan and pay off your mortgage faster while also cutting the amount of interest you pay. The one caution here is to be sure that your lender doesn’t charge a prepayment penalty. If it does, be sure to find out how many years it’s in effect so that you don’t get punished for paying off your loan too early. Rocket Mortgage® doesn’t charge prepayment penalties.

Do interest rates affect mortgage amortization?

Interest rates affect the amount of interest you can expect to pay on an annual basis. However, it doesn’t affect the timing of your amortization schedule. The schedule and when you can expect to pay more principal than interest is based entirely on your loan term.

Why is it important to understand amortization?

Amortization is important to understand because it shows how your payments affect your balance over time. In and of itself, that might not be very exciting, but most calculators allow you to put in periodic extra payments so that you can see how many months early you pay off and how much interest you save by making a concerted effort to pay down your balance.

Mortgage Amortization: A Complete Guide