Tips To Pay Off Your Mortgage Early

Pay Off Your Mortgage, tips to pay off your mortgage

When you take out a mortgage, you’re in it for the long haul – traditional home loans usually take decades to pay off, and a smart home buying budget incorporates mortgage payments and long-term interest into the cost of home ownership.

But what if you could pay off your mortgage early? In this post, we’ll show you a few tips to pay off your mortgage early.


First, let’s look at some reasons to commit to paying off your mortgage ahead of time.


Prepare for retirement


If you’re in a position to pay off your mortgage sooner than planned, you’re probably a diligent saver. You’re already aware that retirement is challenging and often expensive in its own right. Paying off your mortgage early will eliminate one big financial uncertainty – and it’ll protect you from any sharp turns in the housing market. Plus, when you’re debt free, you’ll have the added incentive of knowing that all the money you earn is money you can save for the future.


Pay your kid’s college tuition


You want your budding genius to attend a top-tier school, even if you have to pay top-tier tuition. If you can pay off your mortgage before your children are college-bound, you won’t have to fight a debt war on two fronts. You and your family will have more flexibility when it comes to choosing the right university, and your kids will have more financial security when they graduate.


Decimate your total interest


As with any long-term loan, a significant percentage of your total mortgage cost is a quarter-century or more of interest. This can add up to tens of thousands of dollars over the course of a decade. Think about what you can accomplish by reinvesting that money. If you have an adjustable-rate mortgage, settling your mortgage early will also protect you from interest rate hikes down the road.


Tips To Pay Off Your Mortgage Early


Tip 1: Pay down the principal

If you can scrape together a lump sum, use it to pay down your principal. Most mortgage lenders will allow you to make a payment on the principal alone, rather than the combined principal and interest. Paying down even a small fraction of your principal, especially early on, will save you a significant amount in interest charges down the line – not to mention truncating your total mortgage time. If you don’t have enough money to make a large principal payment, make regular smaller ones. For example, say your monthly mortgage payment is $1332 per month. If you can round up to $1500 or even $1400, those principal payments will add up to hundreds or thousands per year.


Tip 2: Switch to a biweekly payment

Instead of paying once a month, pay fifty percent of your monthly rate every two weeks. In other words, if your usual mortgage payment is $1500 per month, you would pay $750 every other week. This will have a similar impact on your monthly budget, but dividing your payments into weekly rather than monthly installments means that you’ll make a total of thirteen full-size payments per year instead of the usual twelve. You won’t feel like you’re digging deep for the extra funds, but you’ll wind up making an entire extra payment per year – shaving a few years off your total mortgage time-frame.


Tip 3: Refinance for a shorter schedule

Do you have a thirty-year mortgage? Ever thought about refinancing your mortgage? Refinance it as a fifteen-year mortgage. You may score a lower interest rate, and you’ll pay much less in interest overall. In other words, you’ll be making smaller payments for fewer years. If you can’t cut your mortgage period in half, consider a twenty-year loan instead. Even if you don’t officially refinance, you can still cut down your time-frame – simply commit to repaying your mortgage more quickly, and build a monthly budget and schedule around your new numbers. You can use an online mortgage calculator to play around with some numbers.


Tip 4: Commit your windfalls


Most people receive a few windfalls over the course of the year – tax refunds, annual bonuses, gifts. If you can use all or even most of this extra money as an extra payment on your mortgage, you can make significant progress towards cutting down your debt. Each year when you receive a raise, commit to spending a percentage of it on your mortgage – even if it’s just a few hundred additional dollars per year, it’ll add up. This strategy has the advantage of using money you won’t miss – you’re not used to it, and you’ve already learned to budget without it. Using it to reduce your mortgage is one of the best investments you can make.


If you’re a homeowner in a position to radically shorten your mortgage schedule and pay off your mortgage, you’ve already established an impressive record of planning, saving, and budgeting. These few tips to pay off your mortgage can give you an enormous advantage in the mid- to long-term, and they’re easy to seamlessly integrate into your existing financial habits.

Valerie Kriss

This guest post was contributed by Real Estate Experts, a team of expert realtors working with clients in Cary, NC. At Real Estate Experts, our clients are our priority. Visit us online at