A monthly mortgage curtailment plan helps homeowners pay off their loan faster and save substantial interest without breaking the budget. By consistently making small extra payments directly to the principal—even just $50 or $100 monthly—you’ll see how small extra payments add up over time, significantly shortening the loan term and saving tens of thousands of dollars. Automating these payments ensures steady progress towards being mortgage-free..
Whether you’re a first-time homebuyer, seasoned investor, or real estate professional, this guide will help you:
- Understand how monthly curtailment works
- Use real-world numbers to estimate savings
- Build a tailored plan that fits your budget
- Track progress and avoid common mistakes
Let’s get started with the basics.
What Is a Monthly Curtailment?
In simple terms, mortgage curtailment is when you make extra payments toward the principal balance of your home loan. These payments reduce the loan balance more quickly, decreasing the amount of interest you’ll pay over the life of the loan.
Monthly curtailment involves making consistent, smaller principal payments each month—on top of your regular mortgage bill.
💡 Why it matters:
Even small extra payments, when made consistently, can shorten your mortgage by years and save thousands of dollars in interest.
Real-World Example: How Much Can You Save?
Let’s break it down with an example:
- Mortgage amount: $300,000
- Loan term: 30 years
- Interest rate: 6.5%
- Monthly P&I: $1,896
If you add $100/month toward principal:
- You’ll pay off your mortgage about 3 years early
- You’ll save approximately $41,000 in interest
If you raise that to $200/month, you could:
- Pay off your loan 6 years early
- Save $74,000+ in interest
Now imagine how much more you could save with tax refunds, work bonuses, or other financial windfalls applied occasionally.
Why Choose Monthly Curtailment Over Other Options?
Budget-Friendly
Unlike lump-sum payments that require large savings, monthly curtailments let you contribute manageable amounts like $50 or $100 per month.
Consistency Over Time
You build momentum with every extra payment. Over time, this consistency leads to exponential interest savings.
Psychological Win
Seeing your balance drop faster and your payoff date inch closer is motivating. It gives homeowners a sense of financial control.
Easily Automated
Most lenders allow you to schedule extra payments toward principal every month online.
Step-by-Step: How to Build a Monthly Curtailment Plan That Works
Step 1: Know Your Mortgage Terms
Start by gathering key details:
- Current loan balance
- Monthly principal & interest payment
- Interest rate
- Any prepayment penalties (check your mortgage agreement)
- Amortization schedule
This baseline helps you calculate how extra payments affect your loan.
Step 2: Audit Your Monthly Budget
You don’t need to give up your lifestyle to find curtailment money. A few simple swaps can add up fast:
| Budget Area | Monthly Savings Potential |
| Cancel 2 unused subscriptions | $30–$50 |
| Brew coffee at home 3x/week | $40–$60 |
| Cut one takeout meal/week | $50–$80 |
| Lower insurance deductibles | $20–$40 |
| Shift to generic brands | $30–$50 |
Even just $50/month makes a difference!
Step 3: Set a Fixed Extra Amount
Choose a number you can sustain monthly.
Smart Starting Points:
- $50/month: Reduces loan by 2–3 years
- $100/month: Shaves 3–5 years
- $250/month: Could cut 7+ years off your loan
The key is consistency, not size. You can always increase the amount later.
Step 4: Automate Your Extra Payments
Most lenders allow you to:
- Add a second automatic payment each month
- Include a “principal only” section when you pay
- Use online bill pay or apps to earmark extra funds
Be sure to label extra payments for principal only, so they don’t apply to future interest or escrow.
Step 5: Track Progress Annually
Once a year, check:
- New loan balance
- Interest saved to date
- Updated payoff date
Use a mortgage payoff tracker or spreadsheet to stay motivated.
Compare: Monthly Curtailment vs. Other Strategies
| Strategy | Pros | Cons |
| Monthly Curtailment | Easy to budget, consistent results | Slower than lump sum |
| Biweekly Payments | Shaves 1 payment/year, subtle savings | Slightly complex to set up |
| Lump Sum Curtailment | Big impact if timed right | Requires large cash availability |
| Refinance & Pay Extra | Lower rate + extra savings | Closing costs, credit check needed |
Expert Tip: Combine methods! For example, refinance to a lower rate and apply monthly curtailment for maximum benefit.
Boost Your Plan Over Time: Advanced Tactics
- Apply work bonuses or tax refunds toward principal once per year
- Round up your mortgage payment to the nearest $100
- Recast your mortgage if allowed, lowering monthly payments while continuing curtailments
- Reallocate debt payments once other debts are paid off
FAQs:
Can I skip a curtailment if money’s tight?
Absolutely. Monthly curtailments are optional and flexible.
Will extra payments lower my monthly bill?
No. They reduce your loan balance and shorten the term, but your monthly bill stays the same unless you recast or refinance.
Can I do biweekly payments instead of monthly curtailment?
Yes! Biweekly payments offer similar benefits. You’ll make 1 extra full payment per year.
How do I make sure extra payments go toward principal?
Mark payments “principal only” in your online portal or check with your lender’s customer service.
Final Thoughts:
You don’t need to make big sacrifices to pay off your home loan early. A monthly curtailment plan—just adding a small extra amount to your mortgage each month—can help you save money, finish paying off your loan faster, and feel more in control of your finances. It’s a smart, low-stress way to reach your goal of being mortgage-free sooner