>>If I've missed the boat on this extra payment deal let me know.

Here is where I think you are missing the boat:

My understanding of the way it works is as follows:

Example: your mortgae is 100K at 6% interest. Using a 30 year schedule, your payment would be $599.95 per month. For your first payment $500 goes towards interest and 99.55 goes towards principal. (At 6% interst you owe 1/2% on the 100K = $500 interest that month).


Assuming no additional pincipal payment, in the second month, your principal has been reduced to 99,900.45 so the payment would still be $599.95 but in this month interest owed would be $499.50 and principal paid down would have been an additional $100.50.

If instead of making the $599.95 payment the first month, you had sent in an extra $500 with your payment, the interest owed the second month would have been $100,000-99.55-500 X 5%/12 = $497...a savings of $2.50 in interest the first month. You don't actually see the $2.50 savings (i.e. your payment is not reduced), but instead the money is applied to the outstanding principal.

So, the way I see it, even if you don't keep the mortgage to the end, you still save the money. If you end up selling your house in 5 years, all the interest you "saved" comes back to you in a larger check at the time the house sells.