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My monthly mortgage payment is $500 (principal and interest). I sent a payment of $1,000 with the intent of applying the surplus to the principal, but the bank applied the entire surplus to the interest. Can it do this?

Generally, national banks will allow you to pay additional funds towards the principal balance of your loan. However, you should review your loan agreement or contact your bank to find out their specific process for doing so.

Last Reviewed: October 2020

Please note: The terms "bank" and "banks" used in these answers generally refer to national banks, federal savings associations, and federal branches or agencies of foreign banking organizations that are regulated by the Office of the Comptroller of the Currency (OCC). Find out if the OCC regulates your bank. Information provided on HelpWithMyBank.gov should not be construed as legal advice or a legal opinion of the OCC.

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