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[quote=Anonymous][quote]Not OP but I don't understand. Wouldn't you be paying the same interest even if you weren't making extra payments? [quote]

No.  Home mortgages are amortized so that the interest is front-loaded.  The interest on the full loan principle for the full term of the loan is calculated and assigned to the earliest payments.

Your very first mortgage payment is almost entirely interest on the full loan.  The very last payment is almost entirely loan principle.

When you pre-pay, the bank credits each dollar to the last payment and moves backward according to how much is pre-paid.  You will save a little bit on the total dollars paid in interest, but because of the front-loading, you are effectively driving up your rate of loan interest when you pre-pay.  Invest your extra cash somewhere else.

Tip:  When you give a bank a mortgage for a home loan (and you are giving one, not taking one, pet peeve and I digress), try and negotiate an amortization schedule based upon bi-weekly payments, rather than monthly payments.  Most of us get paid every two weeks and they can just debit our bank account accordingly.  In this way, you will save thousands in interest over the life of the loan, without driving up the interest rate on the loaned money.

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