Does additional mortgage principal payment reduce the monthly payment?


No. Any extra mortgage principal payment applies to the principal and reduces the overall interest cost of the loan and the amortization term, but the monthly payment stays the same.

Ways To Reduce the Mortgage Principal And Interest Payment

If you are looking for monthly mortgage payment reduction, you'll have several options:

  • Talk to your lender to restructure your loan by increasing the loan term. If your lender still holds and services the loan, this might be possible with a streamline refinance and one-time fee.
  • If they don't hold your loan any longer, you may have to refinance and you may end up with better rates and longer term.
  • When 20% LTV is reached, private mortgage insurance (PMI) will be dropped and your monthly payment will go down.
  • Refinancing into an Option ARM is by far the most effective way for cutting the mortgage monthly payment. You will be able to make the minimum payment when you need it; or a fully amortizing payment when you can afford it.
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