Quarter of US homeowners making extra mortgage payments
The share of Americans making additional mortgage principal payments has fallen. Rising interest rates and living costs are impacting homeowners' ability to pay down debt faster.
Nearly one-quarter of U.S. homeowners are making extra payments toward their mortgage principal, according to a new report from Rocket Mortgage. This figure fell earlier this year to its lowest level in approximately five years, down from a high of nearly 30% in 2022.
Making extra principal payments can shorten a loan's payoff timeline by several years and reduce overall interest paid. Rocket Mortgage calculated that making just one extra monthly payment annually could shave nearly six years off a 30-year fixed mortgage and save about $68,000 in interest, assuming a 6.67% interest rate.
However, homeowners who purchased homes between 2023 and 2025, when interest rates were higher, are less likely to make these additional payments. The rising cost of everyday expenses, alongside higher monthly housing costs, appears to be making it more difficult for these borrowers to consistently pay down their debt.
The data also indicates that borrowers with higher-rate mortgages tend to make significantly larger extra payments. For all borrowers, it is most common to make additional payments shortly after taking out the loan, suggesting an initial focus on debt reduction and equity building.