6 Strategies to Pay Off Your Mortgage Early

Do you want to pay your mortgage off early …..

but not sure how? Well, you’ve come to the right place! 😊

There is a lot of debate whether to pay off your mortgage early or invest the money towards retirement. There is a lot to consider and understand to determine if it is right for you. It is for us, it might be right for you, and it might be worth it to consider.

Let’s discuss the benefits of paying your mortgage off early and break down some of the more effective strategies to use.

Let’s get started!

Benefits of Paying Off Mortgage Early

You might be wondering, why do I want to pay off my mortgage ahead of schedule? Why do I care?

That’s just it. It depends on your why.

Here are a few reasons to be motivated as well as benefits to paying off your mortgage early.

Save Money on Interest

Each month that a mortgage payment is made, some money goes towards principal and some money goes towards interest. In the beginning, most of your payment goes towards interest and very little goes towards principal. Over time, the ratio shifts so that most of the payment is principal and very little goes towards interest. Remember, the banks are always paid first….. or do they?

How much can you save by paying the mortgage off early?  ALOT!

A good rule of thumb on a 30-year fixed mortgage is that you’ll pay $1-2 in interest for every $1 spent on principal (depending on interest rate). For example, if taking out a 30-year fixed mortgage for $240,000, expect to pay anywhere between $240,000 – $480,000 in interest when all is said and done.

The fewer payment made, the less you will pay in interest. Paying off your mortgage early can literally save you tens of thousands of dollars in interest.

No More Monthly Payments

For most people, their biggest expense, bar none, is their mortgage. A typical mortgage takes up anywhere from 20% – 40% of a household’s budget.

By eliminating monthly mortgage payments, that cash is freed up to put towards other things. For example, that extra money could be invested into retirement so financial freedom is achieved faster. A 529 could be started for your children. Hell, you could even buy a great 2nd home or rental property! 😊

The possibilities are endless…. Choices are a good thing!

Peace Of Mind

If you hit a rough patch in life (Lord knows I did! 😊), there is a possibility that you cannot afford the monthly payment and your home could be foreclosed.

If you payoff the mortgage early, you own the house outright. It’s yours!… and no one can take it from you.

How To Payoff Mortgage Early

Also, you will have more freedom once the mortgage is paid in full. This freedom that no mortgage payment can provide is HUGE! It unlocks your life in so many ways. Imagine splurging a little on a toy you really wanted, speeding up your journey to financial freedom, and potentially freeing you from additional years of work so you can enjoy your life to the fullest….. like I said before choices are a beautiful thing! 😊

I don’t know about you but the opportunity to live my dreams now instead of later really motivates me!

Now for the $10,000 question….. how do I do it?

6 Ways To Pay Off Your Mortgage Early

Make Extra Payments

Let’s say you have a $240,000 30-year mortgage with a 3.5% interest rate. Your mortgage payment is roughly $1,077 per month. I calculated this using Dave Ramsey’s mortgage calculator.

Making 1 extra mortgage payment a year ($1,077) shaves 3 years off the mortgage. Do it 4X per year (~$4,300 per year) shaves 9 years off the mortgage! Averaging out this quarterly amount each month means you pay an extra $375 per month.

Sounds tough to do? Not really. It just means you need to get a little creative. Here are some ideas for paying off your mortgage faster.

House Hack

Single and living alone? Have a bedroom or two available to rent? House hacking may be for you. I did this for several years and it shaved a lot off my mortgage. The key is to pay your mortgage payment like you always do and use the rent money you receive to make extra payments.

For example, if your mortgage is $1,000 per month and you rent out your 2 spare bedrooms at $500 each (Very reasonable rent to charge), that means you are making double the mortgage payment each month. It can cut your term in half!

How To Payoff Mortgage Early

A good friend of mine did just that. He made his monthly mortgage payment and used the rent money he received to make extra payments each month. He paid off his entire mortgage in less than 10 years! ….. true story.

Use “Found” Cash

Now you don’t need a big money payment to make progress on your mortgage payoff. In fact, you can make a huge dent in your mortgage by sending in as little as an extra $25 a month.


Use the cash you are spending on things you don’t really use. Those 3 online subscriptions that cost $10 each and that you haven’t used in 3 years. Lower your expensive gym membership ($40-50 / month) for a more inexpensive gym membership (i.e., Planet Fitness@ $10/month) or even workout at home. Drop that all-access cable subscription you hardly use for a cheaper cable plan.

Hell, you can even save a ton of money by pre-partying at your house before going to the bar! I used to do that all the time and can vouch that it saved me a ton of money AND I still had a great time! 😊

Take your credit card reward points, cash them out, and add to the mortgage payment. I’ve been doing that for years and a few hundred dollars added each year to paying down principal can add up very quickly.

Do you receive a work bonus or a large tax return? What do you spend it on? Toys? A Vacation?

Instead roll that bonus or tax return into the mortgage. Viola, a few years shaved off right there.

Roll all that extra found cash into the mortgage and watch your principal drop like a lead weight!

Change Payment Plan

The most common form of a mortgage payment is the monthly payment. However, you might be able to change up your payment plan to pay off your mortgage faster.

How does it work?

If you make 1 payment a month that adds up to 12 payments per year. But if you change to bi-weekly (pay every 2 weeks) payments, you actually make 26 payments per year. That extra money can really add up.

Here’s an example.

Let’s say you are currently paying $1,000 a month on your mortgage. This adds up to $12,000 per year in mortgage payment. However if you change to a bi-weekly payment plan, you pay $500 every 2 weeks. That adds up to $13,000 per year in mortgage payments. That $1,000 a year of extra payments may not seem significant at first, but as we discussed above, it can shave years off the mortgage and save you tens of thousands of dollars in interest.

The beauty of this payment method is that it comes directly out of your account. It’s easy, painless, and really helps to pay down the mortgage.


Another way to pay off your mortgage early is to trade it in for a better loan with a shorter term, such as a 15-year fixed mortgage. Making this adjustment typically will reduce the interest paid by approximately 40-60% and it’ll be paid off in half the time!

Refinance Mortgage

What if you have a great interest rate and don’t want to give that up? No problem!

Just pay your 30-year mortgage like it was a 15-year mortgage. It saves on the refinancing and closing costs of a new mortgage. Paying like a 15-year mortgage also provides flexibility in case you hit a rough patch and need to back off on the extra payments.

Recast You Mortgage

Another possibility is to do a mortgage recast. A recast is when you place a large payment on the mortgage and then ask the lender to recast (or readjust) the mortgage to the new principal using the same interest rate.

For example, let’s say you put an extra $20,000 on a $120,000 mortgage. The principal now becomes $100,000. A recast is requested from the lender. They will re-amortize (i.e., re-calculate) the loan thereby lowering your payment mount.

Then if you keep paying at the old mortgage amount, you can really attack the principal.

Something to think about…….

Final Thoughts

The idea of paying off a mortgage may seem daunting, maybe even overwhelming. For many of us, mortgage debt is the most debt we will ever take out.

Fear not!

There are many strategies that can be implemented either once or recurring. Find the right strategy that fits your life and your finances. When you do, you’ll be mortgage – free faster than you ever thought possible.

If you are eager to join the 40% of American homeowners who own their home outright…. congratulations!!

Stepping on your paid off basement floor will feel different because you’ve just experienced the feeling …….. of freedom!

Until next time…..

Live The Life You Love, Want, And Deserve 😊