Mortgage acceleration

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Mortgage acceleration is the practice of paying off a mortgage loan faster than required by terms of the mortgage agreement. As interest on mortgages is compounded, early payments diminish the period needed to pay off the mortgage, and avoid a quotient of compounded interest.^[1]

A commonplace method of mortgage acceleration is a so-called bi-weekly payment plan, in which half of the normal calendar monthly payment is made every two weeks, so that 13/12 of the yearly amount due is paid per annum.^[2] Commonplace too, is the practice of making ad hoc additional payments. The agreements associated with certain mortgages preclude or penalize early payments.