Finance guide

Early Mortgage Repayment: Term or Payment?

An early payment reduces principal and future interest. The result depends on whether the bank shortens the term or recalculates the monthly instalment.

Updated: 3 August 2026

Shorten the term

If you can maintain the current monthly budget, shortening the term usually saves more interest because the balance remains outstanding for less time.

Reduce the payment

A smaller instalment improves monthly cash flow and can suit uncertain income, but usually saves less total interest.

Before paying

Ask the bank for a revised schedule, check fees and compare both strategies using the same prepayment amount.

Official source

Central Bank of Armenia