[quote=plm]It still seems to me the earlier you make extra principal payments the less interest you pay and the sooner you pay off the mortgage. Kind of like 401K but in reverse. The sooner you put money in the 401K the longer you have for it to grow before you retire.[/quote]

Except with a house the 401k is already funded to $400k on loan, the investment is already made. The choice is between a new investment or buying out the loan in today’s dollar at 2.75% with return phased out 15 years instead of dollars fifteen years from now. That’s the stinger on principal repayment, the return isn’t realized until the loan is paid off and then it’s in future dollars.

Prepayment doesn’t change your cash flow, minimally changes the interest payment in the near term and delays the return until the end of the loan.