The affordability crisis may be preventing some homeowners from paying off their mortgages early.
The share of Americans who are forking over additional money to pay down the principal on their mortgage fell earlier this year to the lowest level in about five years, according to a new report from Rocket Mortgage. Through the end of January, nearly 25% of the Detroit-based lender’s clients made at least one additional annual payment, down from a high of almost 30% in 2022.
Some people consider extra principal payments to be a savvy financial move because it’s a way to shorten a borrower’s payoff timeline by several years. “For homeowners who have room in their budget and want to reduce debt, small additional principal payments can have a surprisingly meaningful impact over time,” Bill Banfield, chief business officer at Rocket Mortgage, said in a statement.
But the homeowners who stand to benefit most from paying down their mortgage—those who bought homes in the 2023 through 2025 period when interest rates were higher—are less likely to make additional payments. And the rising cost of everyday expenses, alongside larger monthly housing costs, could help to explain why it’s more difficult for these homeowners to consistently make extra principal payments.
Indeed, Rocket Mortgage found that when these high-rate borrowers do make additional payments, they tend to be much larger than their counterparts with low-rate mortgages. And across all borrowers, it’s most common for people to make additional payments shortly after they take out the loan.
This pattern indicates that the urgency to pay off debt wanes after homeowners get settled in their new home. “The beginning of a mortgage may be an important moment when they are particularly focused on reducing debt and building equity,” Banfield said.
THE EARLY PAYOFF DEBATE
People have some strong opinions about whether or not it makes sense to pay off a loan early—and that debate becomes all the more fiercely contested when borrowing costs are factored in.
It’s hard to argue with the value of paying down a mortgage for people with higher borrowing costs. Rocket calculated that homeowners who make just one extra monthly payment each year could shave nearly six years off their loan—while saving about $68,000 in interest—assuming a 30-year fixed mortgage with a 6.67% interest rate and a loan amount of nearly $222,000.
But opponents of early payoff will point to how “the math isn’t mathing” for borrowers who locked in much lower mortgage rates, as many did when 30-year mortgage rates fell to an all-time low of 2.65% in 2021. Such rates are about on par with the current inflation rate, and naysayers argue it makes very little sense to pay down a mortgage when investing that money could yield a better outcome. Even lower-risk assets, like high-yield savings accounts or certificates of deposit, have recently paid higher returns than those ultra-low mortgage rates.
Even so, the fact that nearly one-quarter of Rocket Mortgage borrowers are able to afford making extra payments is somewhat notable, given other trends in the housing market, including a split between high- and low-income households. What’s more, foreclosure filings spiked 21% in the first half of 2026 and the delinquency rate on single-family residential mortgages has been ticking up after reaching a 20-year low in 2023.
WHY PAYING OFF A MORTGAGE IS APPEALING
Whether or not it makes sense to others, the focus of those borrowers who want to pay off their mortgage, even though they snagged ultra-low rates, speaks to how some Americans view the burden of debt. In fact, as Banfield told USA Today, it suggests that the overall trend is “not just math; it’s psychology.”
While older Americans are more drawn to the idea of becoming debt-free and younger Americans find the idea of investing more appealing, the fact that people think so much about the pros and cons of paying off their mortgage early is also telling, as Kate Wood, a lending expert at NerdWallet, told the outlet.
“Owning a home free and clear is aspirational,” she said.
