Posted 12/06/2017

by Aly J. Yale

Aly J. Yale is a mortgage and real estate writer based in Houston. Connect with her at or on Twitter

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Tired of monthly payments? Here’s how to pay off your mortgage sooner

how to pay off your mortgage early

Aly J. Yale

The Mortgage Reports Contributor

You don’t need a lottery win to pay off your mortgage early

Who wouldn’t want to be mortgage-free? Most of us have other things we’d like to do with what we spend on monthly mortgage payments. There is no reason you can’t pay off your mortgage early if you know how.

The truth is, paying off your mortgage early isn’t that hard. In fact, there are four ways to do it right now.

Verify your new rate (Aug 18th, 2018)

Make a bigger monthly payment

Add a little bit extra to each monthly mortgage payment you make – maybe $50 or $100, if possible. You’ll become mortgage-free faster and pay less interest overall.

3 reasons to pay off your mortgage early (and 2 reasons not to)

The best way to make sure your lender applies the extra to your loan balance is to pay this amount separately. Two checks, or two online transfers. When in doubt, call your servicer (the company you send your payment to, which may be different from your original lender).

Make an extra payment

Don’t have the funds to add an extra $50 to your payment every month? No problem. Try adding a 13th payment somewhere during the year instead.

Bi-weekly mortgage programs: Are they even worth it?

Maybe you receive an annual holiday bonus from work, or you’re expecting a bigger-than-average tax refund.  Put those toward your mortgage and make payment No. 13 whenever it’s most convenient.

Refinance to a shorter-term loan

If you have been paying on a 30-year loan for some time, say 10 years, consider refinancing it to a 15-year one. This gets you an interest rate .5 to 1 percent lower than comparable 30-year loans, accelerates your repayment, saves you on interest, and may not even increase your payment.

Should I refinance or just pay down the principal?

If your loan is “younger,” your payment may increase — but each month, you pay more towards reducing that balance and less for interest.

Another way to refinance your way into a shorter repayment is to get a loan with a lower rate and payment, but continue to make the old, higher payment. That money, which you’re accustomed to paying anyway, will whittle down your balance faster and painlessly.

Use your found money

Any time you receive unexpected money, put it toward your mortgage. Cash in your birthday card from grandma?Refund from your insurance company? Add it to the month’s payment.

Can 15-year mortgage rates make you rich?

Getting an inheritance or extra bonus? Send it to your lender. Since it’s not money you were counting on to pay the bills, it won’t be missed.

Get today’s rates

Refinancing can be a great way to pay off your mortgage sooner, and with rates at historical lows, now’s a better time than ever to give it a try. Shop around now and see what refi rates you qualify for.

Verify your new rate (Aug 18th, 2018)


Aly J. Yale

The Mortgage Reports Contributor

Aly J. Yale is a mortgage and real estate writer based in Houston. Connect with her at or on Twitter

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.

2018 Conforming, FHA, & VA Loan Limits

Mortgage loan limits for every U.S. county, as published by Fannie Mae & Freddie Mac, the Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA)