How To Pay Off Your Mortgage Early

February 1, 2022

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Do you want to pay off your mortgage early but you don’t know where to start? You’re in the right place!

There’s a lot of debate about whether or not you should pay off your mortgage. It’s true that an early mortgage payoff might not be for everyone. But it was definitely the right move for our family, and it might be exactly what your family finances need too! 

So let’s break down some of the most effective strategies that you might use to pay off your mortgage. Then, we’ll recap some of the biggest benefits of being mortgage-free. After all, like any financial goal, staying focused on your purpose and maintaining your motivation is the secret to success. 

Here’s how to pay off your mortgage early: 

6 Strategies to Pay Off Your Mortgage Early 

Short of finding a magic lamp, you can’t just wish away your mortgage. But there are some really effective strategies that you can use to ditch that housing debt for good…and way ahead of schedule! 

Here are six tips that you might try: 

Downsize or Minimize

This advice doesn’t necessarily apply if you already have a mortgage. But if you’re shopping for your first home or considering moving, you can pay off your mortgage early by buying less house.

It’s tempting to let the loan approval amount make decisions for you when you’re out looking at homes. But just because you are approved for a $500,000 mortgage doesn’t mean you necessarily have to buy a house in that price range. 

Instead, ask yourself how much home you truly need. Tiny home living certainly isn’t for everyone (it’s not for us!), but McMansions don’t have to be either. By choosing a house that fits your needs, you can live comfortably without a massive mortgage. 

Change Your Payment Plans

So you’ve got a mortgage and you’re looking to get rid of it early. Changing up your payment plan might be the jumpstart you need. 

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

How does that work? Let’s do some math! If you make one mortgage payment each month, you are making 12 payments a year. But if you make biweekly payments, you’re making 26 payments a year. 

Someone who pays $1,000 a month on their mortgage would pay $12,000 a year. However, if you pay $500 every two weeks, you actually pay $13,000. That extra $1,000 might not seem significant. But that’s the beauty of it. It comes out of your bank account painlessly but can really slash away at the life of a mortgage, especially if you have a 30-year mortgage. 

However, you want to check with your lender to make sure that biweekly payments are allowed. In some situations, they may not be.

For other homeowners, it might make more sense to continue to pay monthly. Monthly payments are convenient because they fit in with budgets, which are typically based on a month-to-month schedule. Monthly payments are also familiar for homeowners who have recently made the switch from renting since rent is almost always paid monthly as well. 

To get the full scoop on biweekly versus weekly payments, check out this article.

Stash “Found” Cash

Tai and Talaat McNeely are mortgage free
The McNeely Family

It’s easy to fall into the trap of thinking that you need big money to make big progress on your mortgage payoff. That isn’t the case! In fact, you can make a considerable dent in your mortgage $25 or $50 at a time. 

Just like the McNeely family. They crushed over $300,000 of mortgage debt in five years, partly thanks to small extra payments. Whether it was selling items they no longer needed or leftover money in their budget, they transferred the funds to their mortgage. 

If you find yourself with extra cash anytime throughout the month or at the end of the month, don’t hesitate to make an extra payment. Of course, you want to make sure that your loan is set up to allow for extra payments.

You also want to check that you are paying extra toward the principal. That’s the outstanding loan balance you’re trying to slash away at. You don’t want to contribute any extra to interest! 

Refinance For Real…or DIY

When mortgage interest rates are low, it makes sense to explore options for refinancing your home. You might refinance for a lower rate. So if rates were 5% when you bought your home, you might be able to secure a lower rate of 3% or even 2.5%. 

You might also refinance for a shorter term. It’s true that moving from a 30-year mortgage to a 15-year mortgage will likely increase your monthly payment amounts. But you cross the mortgage finish line years faster that way! 

Of course, before you move forward with a refi, you want to investigate the costs associated with refinancing. It’s also important to consider how long you plan to live in the home after you refinance. 

Sometimes the costs associated with refinancing don’t make an actual refi worth it. But that doesn’t mean you can’t DIY one! By making larger payments each month, you are slashing away at the interest you’d pay over the life off the loan. 

Recast Your Mortgage

If it doesn’t make sense to refinance your mortgage, you might consider a mortgage recast. There are definitely pros and cons to a mortgage recast, but it’s certainly an under-discussed mortgage payoff strategy.

The short and sweet version of a recast is that it’s done after you make one large payment toward your principal.

Let’s say you manage to throw an extra $10,000 at a $100,000 mortgage. Your principal is now $90,000. 

You can request a recast from most lenders. They will re-amortize your loan. That’s a fancy way to say they will recalculate your payment schedule, usually lowering the payment amount.

Whether you decide to refinance or recast your mortgage, you want to reach out to your lender for specifics, including fees, to see if that decision is worth it to help pay off your mortgage early. 


Did you buy your home with a conventional mortgage? If you put down less than 20%, you might be able to shake off some extra cost. PMI–or private mortgage insurance–is applied when buyers fall short of a 20% down payment. It’s extra protection for the lender, and it’s an extra cost for you.

A lot of homebuyers simply continue to make payments, waiting for PMI to be dropped automatically. But you might be able to request to have it removed once you have 20% equity in your home. If that’s the case, you can allocate the money you’d normally spend on PMI and put it toward your mortgage principal instead! 

These are some of the top ways to pay off your mortgage early. Of course, there are so many different strategies that you can use. You might start with one–like getting rid of PMI–and then move on to another. 

Don’t miss even more tips to pay off your mortgage early. 

Why You Want to Pay Off Your Mortgage Early

With all these strategies to pay off your mortgage early, you might be wondering why more people don’t do this.

Some people are focused on other goals. For many people, though, they start with good intentions and then lose their motivation. That’s why a key part of an early mortgage payoff is keeping your WHY front and center in your mind.

Here are some of the main reasons why you might be motivated to ditch your mortgage ahead of schedule. 

Invest More

We all know that investing is the key to creating your ideal future. Whether you intend to retire at the traditional retirement age or you’re on the path to FIRE, you need to invest. But where does the money come from? 

Becoming mortgage-free is a powerful way to ramp up your investments. If you normally put $1,500 a month toward your mortgage payments (principal and interest), when you are mortgage-free, you can immediately transfer the money you would make toward mortgage payments to your investments.

$1,500 a month adds up to $18,000 a year. That’s more than enough for you (and a spouse!) to max out Roth IRA contributions. It also allows you to invest in a 401k up to a company match and then some!

Those are huge strides you can take without worrying about cutting more expenses or earning additional income. Becoming mortgage-free can certainly accelerate your investments. 

While I'm all about mortgage freedom, I know that investing works best when you start early. So ideally, you're investing a portion of your income, perhaps 10-20%, as early as possible.

After mortgage freedom, you can crank it up even higher depending on your goals!

Achieve Coast FIRE Faster

You already know that paying off your mortgage early means you can invest more. Did you realize that it also puts financial milestones like Coast FIRE within reach much faster? When you hit Coast FIRE, it means that you have enough money set aside in your retirement accounts now that you will be able to retire at the traditional retirement age. 

Because your overall living expenses are significantly lower when you are mortgage-free, you suddenly need less money in retirement. That means that your overall Coast FIRE number might drop considerably. Even if you don’t think your target number will drop, you can hit it faster by investing the money you would normally put toward your mortgage. 

Live Your Dreams Now

The Robinson Family is Mortgage Free
The Robinson Family

Paying off your mortgage means big things for your future. But being mortgage-free should let you dream bigger much sooner, too! 

Maybe you’ve dreamt about increasing your charitable giving. One of the first things the Robinson family did with their paid-off mortgage was to increase how much money they donate each year

Perhaps you’ve been daydreaming about taking your dream trip. How fast could you build a sinking fund dedicated to travel if you freed up hundreds or thousands of dollars a month? When the Fearons paid off their mortgage earning less than $50,000 a year, one of the first things they started doing was planning family trips

Make Your Home Your Dream Home

If you’re like most homeowners, you have at least one dream project you’ve been putting off. Maybe you want your bathroom to feel more like a spa or your backyard to become a garden oasis. Or maybe you need the foundation repairs or a new roof.

Most homeowners learn very quickly just how expensive remodeling is even if you DIY. Estimates show that home remodels cost anywhere from $15,000 to over $150,000. Yikes! By paying off your mortgage, you can save for upgrades, updates, or even much-needed fixes. 

Paying off your mortgage early puts a lot of what you’ve been dreaming about within reach.

You’ve already carved out the funds to make your mortgage payment. Once that mortgage is paid off, you can redirect that money toward home projects. Transform your house into a dream home and dodge debt at the same time? That’s a big win! 

Check out these 15 benefits to a paid-off house for more inspiration! 

Final Thoughts on How to Pay Off Your Mortgage Early

The idea of paying off a mortgage can be overwhelming. For most of us, mortgage debt is the most debt we’ll ever take out. It’s no wonder that people often struggle with ideas to ditch that debt faster. 

Consider changing your payments from monthly to biweekly or make a move to ditch your PMI. There are so many strategies that you can implement once or on an ongoing basis. That flexibility means you can find a strategy to fit your finances. When you do, you’ll be mortgage-free sooner than you think! 

Are you trying any strategy to pay off your mortgage early? What motivates you to be mortgage-free?

Please let us know in the comments below.

Andy Hill

Andy Hill, AFC® is the award-winning family finance coach behind Marriage Kids and Money - a platform dedicated to helping families build wealth and happiness. With millions of podcast downloads and video views, Andy’s message of family financial empowerment has resonated with listeners, readers and viewers across the world. When he's not "talking money", Andy enjoys being a Soccer Dad, singing karaoke with his wife and relaxing on his hammock.

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