UNITED STATES

Mortgage payoff, extra payments, and PMI.

The number that matters is interest saved and the month mortgage insurance ends, not a payment you can already get from any bank site.

What “extra” actually does

Each extra dollar is principal. It does not change the rate. On a long loan, $200 a month removes years of interest because the balance the rate is applied to falls faster. PMI in this model is charged on the remaining balance until that balance is 80% of the price you entered. A servicer may use the original appraisal and its own clock.

Is biweekly the same as paying half every two weeks?

For a monthly US mortgage, 26 half-payments add up to 13 full payments a year. That is the extra payment this box adds.

A $400,000 loan at 6.5% for 30 years

The scheduled principal-and-interest payment is about $2,528 a month. With no extra principal, the loan runs 360 months and the interest is about $510,178. Add $200 a month and the same loan ends in 293 months, and the interest falls to about $398,286. The rate on the note did not change. The balance it is multiplied by did. Property tax and insurance, which you can type on this page, are part of the housing payment you feel and they do not shorten the loan.

The biweekly box adds one full scheduled payment once a year. That is the same idea as a monthly extra, just on a different calendar. It is not a different interest method. A third-party program that charges a fee to draft half-payments is selling the thirteenth payment, which you can send yourself.

PMI on this model

If you type a PMI rate, it is applied to the remaining balance and it stops when the balance reaches 80% of the price you entered. A real servicer may use the original amortization schedule, not your extra payments, for the automatic 78% termination, and may require a written request at 80%. Read the cancellation rules before you treat the month on this page as the month the bill changes. The extra-principal guide and the biweekly guide are the two patterns the checkboxes implement.

Tax and insurance are not the loan

A housing payment of $3,200 can be a $2,528 loan payment plus tax and insurance. Only the $2,528, plus anything extra you mark as principal, retires the debt. Raising the insurance premium in the form raises the payment you feel and leaves the payoff date where it was. The PMI rate, if you enter one, is a third piece. It is not principal and it is not the note rate. It drops out of this model at 80% of the price you typed, which may be earlier or later than your servicer’s date. The legal clocks are on the PMI page.