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Mortgage Market Update
Tim Stacey
Tim Stacey
Wednesday, September 2, 2026
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Extra mortgage payments: where do they go? |
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Hi there. I wanted to cover something practical this week that comes up in conversations more often than you'd expect.
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National Mortgage Rates · August 27, 2026
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Source: Freddie Mac PMMS & Optimal Blue via FRED
Rates shown are national averages and are provided for informational purposes only. Actual rates vary based on credit profile, loan amount, and market conditions. Please contact us for a personalized rate quote.
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Mortgage Basics
What happens when you pay extra on your mortgage
One question I get often: if I send in an extra payment or round up my monthly payment, where does that money actually go? The answer matters more than you might think. When you pay above your regular amount, that extra typically goes straight to principal—meaning you're building equity faster and reducing the total interest you'll pay over the life of the loan. Even small additional payments add up over time. That said, it's worth understanding your loan terms first. Some loans have prepayment considerations, and I always recommend making sure extra payments are applied the way you intend. The bottom line: taking control of your payoff timeline is a powerful move, but it helps to have a clear plan. If you'd like to talk through your specific situation and how extra payments could work for you, I'm here to help.
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Tip of the Week
Your mortgage interest may be tax-deductible if you itemize. Check with your tax professional to see if it benefits you.
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Tips for Homeowners
Understanding Mortgage Points
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1.
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One mortgage point equals 1% of your loan amount. Paying points ("buying down the rate") reduces your interest rate — typically 0.25% per point, though this varies by lender and market.
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2.
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Calculate your break-even: divide the cost of the points by your monthly savings. If it takes 4 years to break even and you plan to stay 10 years, buying points makes sense.
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3.
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Points paid on a home purchase are generally tax-deductible in the year paid (if you itemize). Points on a refinance must be deducted over the life of the loan.
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Have questions about how any of this affects your mortgage or home purchase? We're here to help — reach out to the Tim Stacey team any time and we'll walk you through your options. |
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