A recent analysis by Rocket Mortgage reveals that despite the potential savings, most homeowners do not make extra payments on their mortgages. The company examined data from about 3 million home loans originated between January 2021 and January 2026, finding that roughly one-quarter of borrowers chose to make additional principal payments beyond their regular monthly installments.

The likelihood of making extra payments varied significantly depending on when the mortgage was taken out. Homeowners who obtained "ultralow" interest rates averaging just over 3% during the COVID-19 pandemic were more inclined to make extra payments. In contrast, those who secured loans starting in 2022, when mortgage rates rose sharply—reaching an average of 7.40% for a 30-year fixed-rate mortgage as of October—were less likely to put additional money toward their principal. Only about 20% of these higher-rate borrowers made extra payments, a trend Rocket Mortgage attributes to higher monthly housing costs and broader financial pressures that reduce borrowers’ disposable income.

Rocket’s chief business officer, Bill Banfield, noted that borrowers with lower rates often have smaller monthly payments, enabling them to allocate more funds toward additional debt reduction. Borrowers who do make extra payments generally contribute the equivalent of one additional monthly mortgage payment per year, which the company says can save thousands of dollars in interest and shorten the loan term. For example, a homeowner with a median loan of about $222,000 at a 6.67% interest rate could save approximately $68,000 in interest and pay off the loan nearly six years earlier by making this extra payment annually. Making two or more extra payments each year could reduce the loan term by a decade.

Financial experts emphasize that paying down a mortgage early is beneficial only if borrowers have secured other financial priorities. Certified financial planner Emily Jaffe advises that homeowners should first build an emergency fund, ideally covering at least three months of living expenses, and ensure they are contributing enough to retirement plans to receive employer matches. Addressing high-interest debt, such as credit card balances, often offers more significant financial returns than prepaying a mortgage with a relatively low interest rate.

Stephen Roll, research director at Washington University in St. Louis, pointed out that many homeowners lack confidence in their ability to cover unexpected expenses, with about 20% uncertain they could raise $400 for an emergency. He and other experts caution that tying up extra cash in a home loan can reduce liquidity and flexibility, which may be problematic if sudden financial needs arise.

For borrowers with historically low mortgage rates, such as those around 3%, saving or investing extra funds in higher-yield accounts or other vehicles may be more advantageous than prepaying their mortgage. Federally insured savings accounts and certificates of deposit currently offer yields above 3.5%, with the potential for greater returns in the stock market for those willing to accept more risk.

Homeowners interested in making extra payments should consult their mortgage servicers to understand how to properly apply additional amounts to the principal and explore options such as biweekly payments, which can accelerate interest reduction. For those approaching retirement, prepaying a mortgage may align well with anticipated cash flow needs, while for others planning to move within a few years, the financial benefit may be less pronounced.