How to Pay Off Your Mortgage Early: 5 Proven Strategies
Paying off your mortgage early can save you a remarkable amount of money. Because mortgage interest is front-loaded, every extra dollar you put toward principal in the early years removes years of future interest. Below are five strategies, ordered roughly from easiest to most aggressive.
1. Make one extra payment per year
The simplest approach: make 13 monthly payments instead of 12. On a $320,000 loan at 6.5% over 30 years, a single extra payment each year can shave roughly four years off the loan and save tens of thousands in interest. You can do this by setting aside one-twelfth of a payment each month, or by applying a tax refund or annual bonus.
2. Switch to biweekly payments
Paying half your monthly payment every two weeks results in 26 half-payments — the equivalent of 13 full payments — per year. The effect is similar to strategy #1 but automated. Confirm with your servicer that extra amounts are applied to principal, not held for the next due date.
3. Add a fixed amount to every payment
Even a modest, consistent extra amount compounds powerfully. Adding $200/month to that same $320,000 loan can save well over $80,000 in interest and cut the term by several years. Use the extra-payment field in our calculator to see your exact savings.
4. Refinance to a shorter term
If rates have fallen or your income has grown, refinancing from a 30-year to a 15-year mortgage locks in a lower rate and forces faster payoff. Payments are higher, but total interest is dramatically lower. Make sure the closing costs are worth it for how long you plan to stay.
5. Recast after a lump sum
If you receive a windfall, a mortgage recast lets you apply a lump sum to principal and re-amortize the remaining balance — lowering your monthly payment while keeping your existing low rate. It usually costs a small fee and not all loans qualify.
Should you pay off your mortgage early?
Paying extra is most attractive when your mortgage rate is higher than what you'd reliably earn investing, and after you've captured any employer 401(k) match and built an emergency fund. If your rate is very low, investing the difference may build more wealth over time.
- First, capture your full employer retirement match — it's an instant return.
- Keep a 3–6 month emergency fund before accelerating payoff.
- Compare your mortgage rate to expected investment returns.
- Confirm there's no prepayment penalty on your loan.
Ready to run the numbers? Try our Mortgage Calculator.