Arizona Extra Payment Calculator

For a typical $340,000 mortgage (80% of Arizona's $425,000 median home price) at 6.5%, adding $200/month can save you approximately $107,244 in interest and pay off your mortgage 6 years and 4 months early. Your normal total interest would be $433,651, but with extra payments it drops to $326,407. Use the calculator above to see your exact savings.

Both strategies save money, but a lump sum applied early in your loan has the most impact per dollar because it reduces the principal that accrues interest for years. Monthly extra payments offer more consistent savings and are easier to budget for. On a $340,000 Arizona mortgage at 6.5%, a one-time $5,000 payment in year one saves about $10,500 in interest, while $200/month saves $107,244 over the life of the loan. Many Arizona homeowners combine both strategies for maximum benefit.

Arizona law does not specifically restrict prepayment penalties, but federal QM rules apply to most conventional loans, effectively prohibiting prepayment penalties on standard mortgages.

This depends on your mortgage interest rate versus expected investment returns. At 6.5%, extra payments offer a guaranteed "return" equal to your interest rate — that's $107,244 in guaranteed savings on a $340,000 Arizona mortgage. Tax consideration: Arizona has a flat 2.5% state income tax, and homeowners who itemize on their state return can deduct mortgage interest, providing a small additional tax benefit. If your rate is below 4%, investing in diversified funds may earn more over time. Consider your risk tolerance, tax situation, and financial goals.