Making one extra mortgage payment each year is a classic payoff tactic because it blends simplicity with measurable results. The strategy works best when it is deliberate, affordable, and consistently applied to principal.
The approach is easy to explain and automate
Some borrowers add one-twelfth of the payment each month. Others make a full extra payment after a bonus or tax refund. Both approaches can move the loan faster as long as the lender applies the money to principal.
The savings depend on rate, term, and timing
There is no universal savings number. A higher rate, longer term, and earlier adoption usually increase the benefit. That is why calculators are useful: they convert a popular rule of thumb into a real forecast.
The best plan is the one that fits your cash pattern
A household with stable income may prefer a monthly drip approach. A household with commissions or annual bonuses may prefer a single lump sum. The amortization result can be similar even if the cash-flow path differs.
Key takeaways
- One extra payment per year is a practical, high-clarity strategy.
- The outcome varies with loan size, rate, and timing.
- Choose the cash-flow pattern that is easiest for you to repeat.
Reader note
This guide is educational and does not replace lender disclosures, personalized financial advice, tax advice, or legal advice.