💡 Aurebay FAQ

A mortgage overpayment is any amount you pay above your required monthly payment that goes directly toward your loan's principal balance. This reduces the total amount you owe and the interest you'll pay over time.

Example: If your monthly payment is $1,800 and you pay $2,000, the extra $200 is an overpayment.

The savings depend on your loan amount, interest rate, and extra payment amount. Here are typical examples:

• $300k loan at 6.5%: Extra $200/month saves ~$89,000 in interest
• $500k loan at 7%: Extra $300/month saves ~$156,000 in interest
• $200k loan at 5.5%: Extra $150/month saves ~$48,000 in interest

This depends on your mortgage interest rate and investment return expectations:

• High mortgage rates (6%+): Extra payments often make more sense
• Low mortgage rates (3-4%): Investing might yield better returns
• Consider risk tolerance: Mortgage payments are guaranteed savings

Our recommendation: If your mortgage rate is above 5%, extra payments are typically a smart, risk-free investment.

Aurebay's calculator uses standard mortgage formulas and provides highly accurate estimates for principal and interest calculations. However, remember:

• Results don't include taxes, insurance, or PMI
• Actual savings may vary based on your specific loan terms
• Interest rates and payment schedules can change

Always verify results with your lender for the most accurate information.

No! Aurebay performs all calculations in your browser. We don't collect, store, or transmit any of your financial information. Your privacy is completely protected.

Aurebay's calculator is designed for fixed-rate mortgages where the interest rate remains constant. For ARMs, the calculations would only be accurate for the current rate period.

For ARMs: Use the current rate to get an estimate, but remember rates will change based on your loan terms.

Monthly extra payments are generally more effective because they reduce the principal balance sooner, saving more interest over time.

Comparison:

• Monthly $200 extra: Maximum interest savings
• Annual $2,400 extra: Less total savings due to timing
• One-time lump sum: Great if you have a windfall

Any extra payment helps! Even irregular payments can save thousands over time. Consider:

• Using tax refunds for extra payments
• Applying work bonuses to your mortgage
• Making extra payments when your budget allows
• Rounding up your monthly payment (e.g., $1,847 → $1,900)

Recommended priority order:

1. Build emergency fund (3-6 months expenses)
2. Pay off high-interest debt (credit cards)
3. Maximize employer 401(k) match
4. Then consider extra mortgage payments

While generally beneficial, consider these potential drawbacks:

• Opportunity cost: Money could potentially earn more if invested
• Reduced liquidity: Money tied up in home equity
• Tax considerations: Mortgage interest may be tax-deductible
• Other high-interest debt: Credit cards should be paid off first

Even small amounts help! Here's the impact on a $300k, 30-year loan at 6.5%:

• $25/month extra: Saves $11,200 in interest
• $50/month extra: Saves $21,800 in interest
• $100/month extra: Saves $42,000 in interest
• $200/month extra: Saves $78,000 in interest

Always specify that extra payments should go toward principal:

• Online payments: Look for "additional principal" option
• Check payments: Write "Principal Only" in memo line
• Phone payments: Specifically request principal application
• Verify: Check your next statement to confirm proper application

Yes! Extra payments are flexible - you can:

• Start or stop anytime without penalties
• Adjust the amount based on your budget
• Skip months when money is tight
• Resume when your financial situation improves

The key is that any extra payments you've already made continue to save you interest.