RatWatcher

The Easiest Hardest Mortgage Question Ever

Unlike credit cards, additional payments on a mortgage do not reduce the required 'minimum' payment, which is fixed. Instead, the loan matures ahead of schedule. Interest is charged only on the outstanding principal balance...so, each payment after a one-time buydown has a little less interest, and a little more applied to principal. Done regularly (say, $100/mo additional principal) can significantly shorten a loan and the total cost thereof.