How to Pay Off Your Mortgage Early: 7 Proven Strategies

Paying off your mortgage ahead of schedule is one of the most powerful financial moves a homeowner can make. On a typical 30-year loan, you'll pay nearly as much in interest as you borrowed in principal. Cutting that term by even five years can save tens of thousands of dollars.

Consider a $300,000 mortgage at 6.5% interest. Over 30 years, you'll pay approximately $383,000 in interest alone—more than the house itself cost. By implementing the strategies below, you could eliminate $50,000 to $150,000 of that interest expense.

Strategy 1: Make One Extra Payment Per Year

The simplest approach requires minimal budget adjustment. Divide your monthly payment by 12 and add that amount to each monthly payment. On a $1,896 payment, that's an extra $158 per month. This creates the equivalent of 13 payments annually instead of 12.

Result: You'll pay off a 30-year mortgage in roughly 25 years and 9 months, saving over $56,000 in interest. The extra cost? Just $1,896 spread across the entire year.

Strategy 2: Round Up Your Payments

If your payment is $1,896, round it to $2,000. That extra $104 per month goes directly to principal. This approach works because it's easy to remember and budget for a round number.

The impact compounds over time. Each dollar you pay toward principal today reduces the interest charged on every future payment. On our example loan, rounding up saves approximately $38,000 in interest and cuts four years off the loan.

Strategy 3: Apply Windfalls to Principal

Tax refunds, work bonuses, inheritance money, and gifts provide opportunities to make lump-sum principal payments. A single $5,000 payment in year five of a 30-year mortgage can save over $15,000 in interest over the remaining term.

Strategy 4: Switch to Bi-Weekly Payments

Instead of 12 monthly payments per year, make 26 bi-weekly payments. Since there are 52 weeks in a year, this equates to 13 monthly payments annually—one extra payment without feeling the pinch.

Strategy 5: Refinance to a Shorter Term

If interest rates have dropped since you took out your loan, refinancing to a 15-year mortgage at a lower rate can dramatically accelerate your payoff. You'll own your home in half the time and pay significantly less interest.

Strategy 6: Make Principal-Only Payments

Most lenders allow you to make additional principal-only payments at any time. Even small amounts—$25, $50, or $100—add up significantly over decades.

Strategy 7: Redirect Paid-Off Debts

When you pay off a car loan, student loan, or credit card, redirect that payment toward your mortgage instead of absorbing it into general spending.