For homeowners who aren't carrying a lot of other kinds of debt, prepaying a home mortgage can make sense. Right now, the United States is pulling out of a recession that's been the greatest shock to the national well-being since the Great Depression. Millions of people have been forced out of their homes by foreclosure. While some of these former homeowners may have been irresponsible with their money, many of them were individuals hit by an unexpected misfortune like the loss of a job or a catastrophic medical bill. Owning one's own home fair and square in times like these offers a sense of security, since the home's equity can be drawn upon entirely in times of emergency.

Because of the way amortization is structured, a homeowner will pay far more than the price tag on his or her home over the entire course of the mortgage. Much of that payment will be interest. By prepaying a mortgage, homeowners can save tens of thousands of dollars that would otherwise be paid in interest to the lender over the term of the loan.

But home mortgage rates right now are at an historic low. There are other investments a homeowner can make that may provide a much higher rate of return than what they may be saving in loan mortgage rates. If investments carry returns that are significantly higher than loan mortgage rates, homeowners will earn more money by investing than they will by prepaying their mortgages.

Additionally, mortgage interest provides a major tax break for many people. The savings here can be measured by the difference between the mortgage rate and the deduction rate.

If homeowners do decide to pay extra on their home mortgages, they need to read their contracts carefully. Because home mortgage rates are so low right now, many lenders are building in prepayment penalties, though the majority of mortgages that carry prepayment penalties only apply them during the first five years of the loan and only if more than 20 percent of the principal is remitted. Homeowners must also make sure the lender understands the extra funds are intended to be applied to the principal amount rather than to the following month's bill.

When homeowners are carrying large amounts of other debt, however, particularly unsecured, high-interest credit card debt, it makes no sense to prepay a relatively low interest mortgage loan.