Typically, yes, it saves you quite a bit of money when you prepay your mortgage each month. But there are exceptions, depending on your unique situation.
For instance, if you don’t already have three to six months of expenses in savings, you should have that emergency fund or safety net, financially speaking, before you prepay your mortgage.
Before deciding to prepay your mortgage, you should also look at your other debts first. If you have credit card balances, they likely charge a much higher interest rate than your mortgage, so you should pay those loans first, then tackle your mortgage. Finally, there could be times when your money would be more wisely invested elsewhere, depending on your expected return, compared to what you would save through early payments on your mortgage.
If, after checking your emergency fund, any credit card debt, and possible investments, you find all to be in order, then prepaying your mortgage can be a very good idea.
Stay In Touch