Extra payment to principal may not dent monthly payments

Many borrowers would like a mortgage on which the monthly payment would drop following a large payment to principal. They may have highly irregular income, or they may anticipate coming into a large sum of money from a bonus, bequest or insurance settlement.

Mortgages fall into four categories with regard to how responsive they are to this need. Standard fixed-rate mortgages (FRMs) are the least responsive.

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