Does paying extra on mortgage principal save interest?

Yes — significantly. Extra payments reduce the principal immediately, which reduces interest charged on the remaining balance. On a $300,000 mortgage at 6.5% over 30 years, paying an extra $200/month saves over $65,000 in interest and cuts 6.5 years off the loan. The earlier you start extra payments, the more you save because interest is front-loaded.

Should I pay off my mortgage early or invest?

The math says: if your mortgage rate is 4–5% and you can earn 7–10% in index funds, investing beats paying off the mortgage. But payoff certainty, emotional peace, and reduced risk are real benefits. Most financial advisors suggest a middle path — contribute to tax-advantaged accounts (401k, IRA) first, then split extra money between mortgage paydown and taxable investments.

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