For most people, a mortgage is one of the biggest financial commitments they will ever make. It can also be a long-term one, often taking 15 to 30 years to pay off. However, paying off a mortgage early is a smart financial goal that can save borrowers thousands of dollars in interest charges. In this article, we will explore several tips and strategies for paying off a mortgage early.

Make Extra Payments

Making extra payments is one of the easiest and most effective ways to pay off a mortgage early. Even adding just $50 or $100 to your mortgage payment each month can make a big difference in the long run. For example, suppose you have a 30-year mortgage of $200,000 with a 4% interest rate. By paying an extra $100 per month, you could pay off your mortgage 4 years earlier and save over $21,000 in interest charges.

To make the most of this strategy, set a goal for how much extra you can afford to pay each month, and be consistent with your extra payments. You can also make lump-sum payments when you have extra cash on hand, like a work bonus or tax refund.

Refinance Your Mortgage

Refinancing your mortgage can help you pay off your mortgage faster by reducing your interest rate or shortening the loan term. If you currently have a higher interest rate than the current market rates, refinancing can save you thousands of dollars in interest charges over the life of the loan.

However, it’s important to weigh the costs of refinancing, such as closing costs, against the potential savings. If you plan to move in a few years, refinancing may not be worth it because of the closing costs. Before refinancing, make sure to calculate your savings and consider all the costs and potential drawbacks.

Bi-Weekly Payment Plan

Another strategy to consider is setting up a bi-weekly payment plan. Instead of making one monthly payment, you can make half your monthly payment every two weeks. This strategy can actually add up to an extra payment each year and save you thousands of dollars in interest charges.

Check with your lender about setting up this type of payment plan to ensure there are no fees or penalties. You can also try doing it yourself by dividing your monthly mortgage payment in half and paying that amount every two weeks.

Make Lump Sum Payments

Lump sum payments can give you a huge boost in paying off your mortgage early. When you receive unexpected income or windfalls like a work bonus, tax refund, or inheritance, you can put all or part of the funds towards your mortgage.

For example, suppose you have a mortgage of $200,000 with a 4% interest rate and a monthly payment of $954.83. If you put an extra $10,000 towards your mortgage once a year, you could pay off your mortgage 6 years early and save over $27,000 in interest charges.

Cut Back on Expenses

Reducing your expenses can free up more money to put towards your mortgage. Consider cutting back on everyday expenses like groceries, entertainment, and dining out. You can also look for ways to save on utilities, insurance, and other monthly bills.

Although these small savings may not seem like much at first, they can add up quickly and make a big difference in the long run. Plus, cutting back on unnecessary spending can also help you develop better financial habits that will serve you well in the future.

Start a Side Hustle

Starting a side hustle can provide extra income to put towards your mortgage. Whether it’s pet-sitting, freelance writing, or driving for a ride-hailing service, there are endless possibilities for earning extra cash on the side.

Take some time to assess your skills and interests, and find a side hustle that works for you. You can also look for opportunities that allow you to work from home or on a flexible schedule.

Rent Out Your Home

If you own a home and have extra space, you can consider renting it out to generate extra income. You can rent out a room in your home, or rent your entire home when you’re away on vacation or business trip.

Keep in mind that being a landlord comes with costs and responsibilities. You will need to research local laws and regulations for renting out your property, and make sure you are prepared for the additional workload that comes with being a landlord.


Paying off your mortgage early is a long-term goal that requires commitment and patience. However, with the right strategies and mindset, it is achievable, and the payoff can be significant.

We recommend starting with a combination of making extra payments, refinancing, and making lump sum payments. For those who can spare a little more cash, setting up a bi-weekly payment plan or cutting back on expenses can add that important extra payment each year. Starting a side hustle or renting out your home can be an effective means of generating extra income, while careful budgeting can free up cash for extra payments.

Whichever strategy you choose, remember that the key to paying off a mortgage early is consistency and discipline. Stick with your plan and before you know it, you’ll be mortgage-free.

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By Happy Sharer

Hi, I'm Happy Sharer and I love sharing interesting and useful knowledge with others. I have a passion for learning and enjoy explaining complex concepts in a simple way.

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