Last updated:
Why Prepay
Extra principal reduces balance sooner, lowering total interest and potentially shortening the term. Balance this with liquidity for operations and maintenance reserves.
Modeling in the Calculator
- Set a baseline scenario in the calculator.
- Add recurring extra principal and export CSV; compare total interest and payoff date.
- Test lump‑sum prepayments and consider prepay penalties.
Common Pitfalls
- Prepaying aggressively and starving maintenance/insurance reserves.
- Ignoring prepayment penalties or make‑whole provisions.
- Missing better ROI uses of cash.
Related: refinancing, fixed vs variable, payment frequency. External: CFPB · FRED · NBAA.