Survey Finds Nearly a Quarter of Homeowners Pay Extra Toward Their Mortgage Annually

Survey Finds Nearly a Quarter of Homeowners Pay Extra Toward Their Mortgage Annually

A new survey released by Rocket Companies suggests that extra mortgage payments are more common than many borrowers might assume: close to one in four homeowners report making at least one additional payment toward their home loan each year. According to the findings, that habit can shave as many as six years off the life of a traditional mortgage, since extra dollars are applied directly to principal and reduce the interest that accrues over time.

The practice of making a 13th payment annually is a long-standing prepayment strategy, and the Rocket data indicates it has gained a meaningful foothold among today’s homeowners. Biweekly payment plans, rounding up monthly installments, and lump-sum contributions from bonuses or tax refunds are common ways borrowers accelerate payoff timelines without refinancing.

The release arrives amid heightened focus on housing affordability and consumer balance sheets. With mortgage rates elevated relative to the pandemic-era lows many borrowers locked in, refinancing activity has cooled, making principal prepayment one of the few levers available to homeowners looking to reduce total interest costs without taking out a new loan.

For Rocket Companies, the survey underscores its positioning as a direct-to-consumer voice in personal finance. The Detroit-based fintech, which operates Rocket Mortgage and related real estate and personal finance businesses across the United States and Canada, has increasingly used consumer research to drive engagement across its Direct to Consumer and Partner Network segments.

Investors were watching the stock on the day of the announcement. Shares of Rocket Companies, Inc. (NYSE: RKT) traded at $14.22, up 4.87% from the previous close of $13.56, giving the mortgage-finance company a market capitalization of roughly $39.0 billion.

Prepayment behavior carries real implications for mortgage lenders and servicers. Faster payoffs reduce the stream of interest income on originated loans, though engaged borrowers who actively manage their mortgages can represent opportunities for lenders offering recapture, home equity, and personal finance products. Rocket has emphasized cross-sell across its platform, and survey-driven content is one channel through which it maintains relationships with existing clients.

What to watch

• Rocket Companies’ upcoming quarterly earnings report, including origination volume and gain-on-sale margins
• Any follow-up consumer research from Rocket on prepayment and refinance behavior
• Direction of mortgage rates and their effect on prepayment versus refinancing activity
• Updates on Rocket’s Direct to Consumer and Partner Network segment performance

Source: original release