How To Change Your Mortgage Amortization Schedule

3 Min Read
Published Nov. 30, 2022
FACT-CHECKED
Man checks finances on his phone and laptop.
Written By
Reviewed By

One of the benefits of mortgage amortization is that it tells you how much you’ll pay each month, and when you’ll finish repaying your home loan.

if you’re struggling to cover your mortgage payment each month — or you’re making a lot more money than you were when you first took out your loan — then you may benefit from adjusting your amortization schedule.

Here’s how to change your mortgage amortization schedule.

Reduce Your Monthly Payment

If you’re having a hard time affording your mortgage each month, changing your amortization schedule can reduce your monthly payment. These are the options:

  • Refinance to a longer loan term. This gives you more time to pay off your loan, and lowers the monthly payment. However, it also means you’ll be making payments longer and paying more interest, which increases the total cost of your loan.
  • Loan modification. A loan modification changes the terms of your existing loan. A loan modification could help you lower your interest rate or extend your loan term. However, mortgage lenders aren’t obligated to accept requests for a loan modification.

Pay Off Your Loan More Quickly

The faster you pay off your mortgage, the more quickly you’ll own your home free and clear, and the less overall interest you’ll pay. There are several ways you can do this:

  • Refinance to a shorter loan term. If you refinance to a shorter loan term, then you won’t have to pay as many years of interest. Just be prepared for a higher monthly payment.
  • Make extra payments. Instead of committing to higher monthly payments, you can just make extra payments when you’re able to afford it. The extra will be applied to your loan balance, reducing it more quickly than if you just made the required payments.
  • Pay more each month. Instead of making your minimum mortgage payment, you could pay extra each month. Again, the extra is applied to your loan balance, and you’ll chip away more quickly at your principal balance over time.
  • Switch to biweekly payments. Many lenders let you pay half the monthly payment amount every other week. This schedule means that, over 52 weeks, you’ll make 26 half-monthly payments — equivalent to 13 monthly payments instead of 12.

However, some lenders charge a prepayment penalty if you repay your loan early. Before you start making extra payments, find out if your loan has a prepayment penalty. It may be worth eating the cost of the fee if you stand to save more money on interest by paying off the loan early.

Pros and Cons of Changing Your Mortgage Amortization Schedule

Here are some of the benefits and drawbacks of changing your mortgage amortization schedule.

Pros

  • You can reduce your monthly payment, freeing up more room in your budget.
  • You can pay off your loan sooner and save on interest.

Cons

  • If you pay off your loan sooner, you may face a prepayment penalty.
  • If you shorten your loan term, then you’ll need to make higher monthly payments.
  • If you extend your loan term, then you’ll pay more overall for the loan.
Share:

Ready for more learning?

Here’s some other helpful articles

Related Articles

**itsHome, a LMB Mortgage Services, Inc. company, is not acting as a lender or broker. The information provided by you to itsHome is not an application for a mortgage loan, nor is it used to pre-qualify you with any lender. If you are contacted by a lender or broker advertising within our network, your quoted rate may be higher depending on your property location, credit score, loan-to-value ratio, debt-to-income ratio, and/or other factors. itsHome does not offer its matching services in all states. This loan may not be available for all credit types, and not all service providers in the itsHome network offer this or other products with interest-only options. The information that we provide is from companies which itsHome and its partners may receive compensation. This compensation may influence the selection, appearance, and order of appearance on this site. The information provided by itsHome does not include all financial services companies or all of their available product and service offerings. We use cookies to track data and provide you with the best possible experience. By proceeding you consent to the use of these cookies. For more information, see our Privacy Policy.

itsHome, a LMB Mortgage Services, Inc. company NMLS #167283, www.nmlsconsumeraccess.org