Strategies to Pay off Your Mortgage Early

Paying off your mortgage early can certainly have a huge impact on your ability to save money. In this day and age of continual problems in the mortgage industry, it can truly be an achievement to eliminate your mortgage payments entirely before the term of the loan comes to an end.

Paying off your mortgage early is not as difficult as you may think even if you don’t have tons of money sitting in the bank. Here are some strategies to make your payoff early so you can save your mortgage payment for other reasons:

A Little Extra, Big Difference

You can start adding a few extra dollars to your monthly mortgage payment to start. A mortgage calculator can help you determine how much to add on to your normal payment. If you are paying a bit more each month toward your principal, you will get further ahead in a faster period of time. If you can’t spare a lot of extra cash, just round up your current payment amount such as if you pay $733 each month, start sending in $740 until you can increase your extra payments. A few extra dollars each month can literally cut down a number of loan payments at the end of the loan term. You may have to specify with your lender that you prefer the overage to go towards principal rather than be applied to your next month’s payment.

Go Bi-Weekly

With this strategy, the calendar is on your side. Bi-weekly payments entail paying half of your mortgage every two weeks. This counts out to a total of 13 months’ worth of payments rather than the usual 12 months in a calendar year. By using this method, you can knock off nearly 6 years from your loan term on a 30 year mortgage. Speak with your lender about how best to set up this method for making payments.

Go Ahead with a Refinance

If you have a 30 year mortgage with some time in, you can consider a mortgage refinance provided your credit score is good. Refinancing to a 15 year mortgage is pretty common among homeowners looking to cut down on their loan terms. You will incur a higher monthly mortgage payment through the refinance but you will also save years on interest rates than you would with your original 30 year mortgage.

Pretend You Refinanced

You can act like you refinanced your 30 year mortgage by calculating how much extra you’d have to pay by refinancing to a 15 year mortgage. Use a mortgage calculator to do the math. If you would end up paying an additional $260 a month through a refinance, start paying that additional amount along with your normal monthly mortgage payment. This will cut years of interest charges and allow you to remain in control of your loan. This method may work well for those that have extra cash but not-so-great credit histories.


  1. A little does not seem like much, but over a 30 year period it adds up. A mortgage usually is the largest part of your debt.

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