Effective Ways to Pay off Your Home Mortgage as Early as Possible


More than 2/3rd of homeowners are whittling their mortgage payments year after year until they are completely paid off. The psychological pressure of paying slashing interests against a home loan is crushing. Several homeowners are keen to repay their loan as early as possible. If you have taken a loan for financing your home purchase, then you too can pay off your mortgage early. 

Is It Possible To Pay a Mortgage Early?

Obviously, it is possible! Every time you pay a little extra, it reduces the principal balance. However, you need to understand the ground rules before you take steps to pay little more than what is the specified monthly interest.

  • Some lending firms accept extra payments only during specific times and can charge prepayment fines. Therefore, it is better to check with your lender beforehand.
  • Convey a message to the lender that the extra payment is to be applied to your principal balance and not the subsequent month’s payment. 
  • Never spend your funds on some fancy mortgage accelerator program. The same goal can be achieved on your own!

You can visit IraInvesting.com, a website that educates people on retirement savings. This educational website even reveals smart ways of paying off your mortgage in 5 years. You can also check the mortgage payoff calculator online to get an estimate on how rapidly your home loan can be paid off.

Biweekly Mortgage Payments as a Factor To Pay Off Your Mortgage Earlier

Pay Off Your Mortgage Early

If a mortgage payment is made monthly, it means you make 12 payments every year. If you enroll in a biweekly payment program, then you will be paying half once every 2 weeks. There are 52 weeks in one year, so you pay 26 biweekly payments or 13 monthly payments. 

Your principal amount will start to lower quickly, since you make 13 monthly payments every year. For example, a 30-year fixed home loan on $250,000 at 4% interest can save you nearly $30,000 on interest with a biweekly payment program. Thus the loan can get paid off in 25 years. 

If you choose to biweekly payment program ensure that the extra payments get applied correctly, meaning to reduce the principal amount and not prepaying the interest. The lender needs to understand your concept for extra payment is only for principal-only and not next month’s interest payment.

Baby steps can be helpful

Every dollar added to every month’s regular payment puts a huge dent in the principal balance. Just adding a single extra payment every year cuts down mortgage of years. Some methods to pay extra and how it affects your mortgage duration. For example, a 30-year fixed home loan on $220,000 at 4% interest –

  • Make extra payment quarterly – You save $65,000 + the interest and mortgage gets paid off in 11 years.
  • Bring lunch to work – Trading a $100 monthly lunch cash towards extra payment on the mortgage will save $28,000 + interest. You can pay off 3 years in advance.
  • Say no to caffeine – According to a survey, average American spends $3 daily on coffee. It totals to $90 every month when added to your loan payments helps to save $25,000 on interest, which means 4 years off your loan life!
  • Small sacrifices – Adding $20 towards loan payment every month can save more than $7,000 allowing you pay off 1 year early. 

Refinancing to Pay Off Your Mortgage Faster 

It makes sense to refinance a long term 30-year mortgage into 15 years if you can lock low-interest rates. However, there are refinancing charges, so ensure the savings will cancel refinancing costs. 

Mortgage Recasting

When Refinancing mortgage your existing loan, you pay a lump sum towards the principal amount. The lender adjusts your amortization schedule, which will reveal the new balance. Thus, your loan term shortens. Mortgage recasting fees are extremely lower than loan refinancing. Besides, if your interest is low, you can continue with it. Nevertheless, if your interest is high then mortgage refinancing is a better option. 


If you have a big home and are planning to get rid of the mortgage early, then consider selling it and using the profits to buy a small, less costly home. Profits from selling a big home can possibly help you pay the total cash for a new home. 

Even if you need to enroll in a small home loan, you succeeded in lessening your debt. The next step is to plan in getting rid of this small loan as fast as you can. A small balance can be paid off quickly!

Early payments are worth, but ensure your finances allow you to do it. Everyone’s situations, debt tolerance and risk appetite differ. Paying off a loan early is like investing in an illiquid asset. The funds cannot be tapped easily. So ensure you have some emergency funds accessible before applying extra payments for mortgage payoff. 

However, paying your home loan off early helps to increase monthly cash flow and retirees can enter their retirement life without any burden of a monthly mortgage payment. 

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