Is it better to pay lump sum off mortgage or extra monthly?
Contents

Nearly all mortgages allow the homeowner to make additional payments monthly or in a lump sum towards your principal. Regardless of the amount of funds applied towards the principal, paying extra installments towards your loan makes an enormous difference in the amount of interest paid over the life of the loan. Additionally, the term of the mortgage can be drastically reduced by making extra payments or a lump sum. Combining both strategies can make an even bigger difference. The good news is it doesn’t take much to make a big difference in savings. Making one extra payment per year can shorten a 30-year mortgage by greater than five years! All it requires is a little discipline to become mortgage-free a lot faster.
![]() |
![]() |

Lump-sum mortgage calculator
A lump-sum deposit provides the most substantial impact, especially if it is applied shortly after taking out a new mortgage. Depending on the amount, you can also apply for a recast and have your monthly payment changed based on the new balance. However, in order to apply for a recast, most banks will require at least $10,000 or up to 10% of the loan balance. If approved, the amount of interest paid over the life of the loan will be reduced significantly. For more specific estimates, use a mortgage calculator to understand the impact.
Will my mortgage payments go down if I pay a lump sum?
Your recurring monthly mortgage payment will remain the same even when you submit an additional payment or lump sum unless you recast your loan. If you make a lump sum, your repayment agreement with your lender remains unchanged, but it will drastically reduce the amount of interest paid over the life of the loan and will reduce the overall term.
Feel free to reach out to the Cain Mortgage Team for more analysis and to see which option is better for you at 803 261 9267.