The mechanics of sending extra money toward your mortgage
An extra mortgage payment means sending your lender more than your regular monthly payment. That money goes toward your principal balance—the amount you actually owe—rather than interest. You can make an extra payment in a lump sum, split it across multiple months, or pay half your monthly payment twice a month instead of once.
The process itself is straightforward: contact your lender, ask how they accept extra payments, and specify that the money should go toward principal, not be held in escrow or applied to next month's regular payment. Some lenders let you pay online through their portal. Others require a check, wire transfer, or phone call. The key is being explicit about your intent, because if you do not specify, the lender may treat extra money as a prepayment of your next scheduled payment rather than a principal reduction.
Timing matters less than consistency. You can make an extra payment whenever you have the cash—after a bonus, tax refund, or sale of something you own. Some people make one large extra payment per year. Others add a small amount to every monthly payment. Both approaches reduce your loan balance and shorten your payoff timeline.
Key Takeaways
- Always tell your lender in writing or through their online system that extra money should go toward principal, not be held as a prepayment of your next regular bill.
- Contact your lender before sending extra money to confirm they accept it without penalty and to learn which payment method they prefer.
- Extra payments reduce the total interest you pay over the life of the loan and shorten the number of years until you own your home outright.
- Some loans have prepayment penalties that charge you a fee for paying off the balance early, so check your promissory note or loan documents before you start.
How to contact your lender and request the payment method
Your mortgage servicer—the company that collects your monthly payment—is listed on your statement. Call the number on that statement or log into your online account. Ask specifically: "How do I send an extra payment toward principal?" and "Do you charge a prepayment penalty?"
The servicer will tell you the accepted methods. Most large servicers accept online payments through their website or app, which is the fastest route. Some accept phone payments by debit card. Others require a check mailed to a specific address. A few still require you to call and authorize a bank draft from your checking account.
Write down the exact instructions, including any reference number or account code to use. Some servicers have a separate mailing address for extra payments. Using the wrong address or method can delay the payment reaching your account.
Checking your loan documents for prepayment penalties
Before you send extra money, open your promissory note—the document you signed when you took out the loan. Look for language about "prepayment penalty" or "early payoff fee." If your loan has one, it will specify the penalty amount and the window during which it applies.
Prepayment penalties are less common in mortgages than in other loans, but they do exist, especially in loans issued during the 2000s or in subprime mortgages. A typical penalty might be 1 to 3 percent of the loan balance if you pay it off within the first three to five years. Some penalties apply only if you refinance, not if you pay extra on your current loan.
If you cannot find the promissory note, call your servicer and ask directly: "Does my loan have a prepayment penalty?" They are required to tell you. If a penalty exists and the window has not closed, you can still make extra payments—you just need to weigh the penalty cost against the interest savings.
Online payment portals and how to designate the payment
Most servicers now offer an online portal where you can log in, see your balance, and make payments. To send an extra payment through the portal, log in and look for a button or link that says "Make a Payment," "Pay Now," or "Additional Payment." Do not use the automatic payment setup—that is for your regular monthly bill.
When you enter the payment amount, the portal usually asks you to choose where the money goes. Select "Principal" or "Extra Payment" if that option appears. Some portals show you a dropdown menu; others ask you to write a note. If the portal does not give you an option to designate the payment, send an email to your servicer's customer service address (found on your statement) with your loan number, the payment amount, and a clear statement: "This extra payment should be applied to principal only."
After you submit the payment, the portal will show a confirmation number. Take a screenshot or write it down. Check your account a few days later to confirm the payment posted and that the principal balance decreased.
Mailed checks and wire transfers
If your servicer does not accept online payments, you can mail a check. Write your loan number on the check memo line. Include a letter stating your name, loan number, the payment amount, and the instruction: "Apply this payment to principal only." Mail it to the address your servicer gave you for extra payments—not the regular payment address, if they are different.
Mailed checks take 7 to 14 days to clear, depending on mail speed and your servicer's processing time. If you need the payment to post faster, ask your servicer whether they accept wire transfers. A wire transfer typically posts within one business day and costs $15 to $30 through your bank. Provide your servicer's wire instructions and include your loan number in the wire reference field.
Keep a copy of the check or wire confirmation. If the payment does not appear on your statement within three weeks, contact your servicer with proof that you sent it.
What happens after your extra payment posts
Once your extra payment clears, your principal balance will drop by that amount. Your next regular monthly payment will stay the same—extra payments do not lower your monthly bill. Instead, they reduce the total number of payments you will make over the life of the loan.
For example, if you have 25 years left on a 30-year mortgage and you send one extra payment per year, you might pay off the loan in 22 or 23 years instead. The exact savings depend on your interest rate and how much extra you send. Your servicer can run a payoff calculation for you if you ask.
Check your statement the month after the payment posts to confirm the principal balance decreased. If it did not, or if the payment was applied to your next month's regular bill instead of principal, contact your servicer immediately and ask them to correct it. Keep records of all extra payments you make, including dates, amounts, and confirmation numbers.
Strategies for making extra payments consistently
The most effective extra payments are the ones you actually make. If you wait for a windfall, you might make one or two per year. If you build extra payments into your budget, you will make them every month.
One common strategy is the "biweekly payment" approach: instead of paying your full monthly payment once a month, you pay half every two weeks. Over a year, this adds up to 26 half-payments, which equals 13 full payments instead of 12. That one extra payment per year compounds over time and can shave years off your loan.
Another approach is to add a fixed amount to your regular payment each month—$50, $100, or whatever fits your budget. This is easier to track than waiting for bonuses or tax refunds. Some people tie extra payments to a specific income source: they send their annual tax refund, their work bonus, or a percentage of a raise directly to their mortgage.
The key is consistency and clarity. Whatever method you choose, make sure your servicer knows that every extra dollar should go to principal, and verify on your statement that it actually does.
Frequently Asked Questions
Will making extra mortgage payments hurt my credit score?
No. Extra payments reduce your loan balance and show that you are paying reliably. Your credit score may actually improve slightly because your debt-to-income ratio improves. The only scenario where it could matter is if you pay so much extra that you pay off the loan early and close the account, but even then the impact is minimal and temporary.
Can I get my extra payment back if I change my mind?
Once an extra payment is applied to principal, it is permanent. You cannot reverse it or get a refund. If you think you might need the money, do not send it as an extra mortgage payment. Keep it in savings instead.
What if my servicer will not let me make extra payments?
This is extremely rare. Federal law allows you to pay off a mortgage early without penalty in most cases. If your servicer refuses to accept extra payments or charges a fee, check your loan documents for a prepayment penalty clause. If no penalty exists and they still refuse, file a complaint with the Consumer Financial Protection Bureau or your state's attorney general.
Does it matter whether I make one big extra payment or many small ones?
The total amount matters more than the frequency. One $1,200 extra payment saves the same amount of interest as twelve $100 extra payments, assuming the same interest rate and loan term. Make whichever approach fits your cash flow and discipline.
Should I make extra mortgage payments or pay down other debt first?
That depends on your other interest rates. Credit card debt typically carries 15 to 25 percent interest, while mortgages usually carry 3 to 8 percent. Paying off high-interest debt first saves you more money overall. Once high-interest debt is gone, extra mortgage payments become a better use of your money.