Here in Birmingham, savvy homeowners often ask me about strategies for building equity and saving money on their mortgage. One of the simplest? Paying an extra $100 on your mortgage each month. Let me show you just how powerful this can be with a real Birmingham example.
Imagine you have a 30-year, $250,000 mortgage at a 6% interest rate. Your base principal and interest payment would be about $1,499 per month. If you commit to adding just $100 extra each month—applied directly to principal—you could cut nearly four years off your mortgage and save about $36,000 in interest over the full loan term.
How? Each extra payment goes directly toward your principal, lowering the amount on which future interest is calculated. Over time, this compounding effect accelerates your payoff schedule. Even smaller extra payments—$50 per month or one lump sum per year—add up.
Here’s my local tip: Contact your lender and specify that your additional funds apply to principal only. One that I always highly recommends, is Diana Will with Mortgage Right. Some lenders process extra payments as prepayments on future installments, not principal reduction, unless you indicate otherwise.
For Birmingham buyers, making modest but regular extra payments can build home equity faster. That gives you more flexibility if you want to refinance, sell, or tap into home value for improvements. Need help running the numbers? As your trusted agent, I connect clients to local lenders and tools to visualize the savings.
With homeownership, small habits can lead to huge long-term financial gains. Let’s talk about your goals—I’m here with local expertise and proven strategies to make the most of your Birmingham home investment.
