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How to pay off your mortgage faster

You stand to save thousands in interest when you make extra payments and pay off your home loan early.

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Paying off your mortgage faster could save you an enormous amount of money in interest. Aside from coughing up a big down payment or making extra mortgage payments when you can, there are several ways to reduce how much you’ll pay over the life of your loan.

Switch to biweekly mortgage payments

If your lender allows it, make a payment every two weeks instead of monthly. Because there are a little over four weeks in a month, you’ll end up making one extra monthly payment a year, which could potentially knock six to eight years off the life of the mortgage.

Ask your loan servicer if they offer biweekly payments. But double-check that they are actually paying off your home loan twice a month and not holding your payment in an account until the due date.

Make extra payments

If biweekly payments aren’t an option, you can still make an extra payment every year. You could add a bit to your monthly payment or make a lump sum mortgage payment. Confirm with your mortgage company that you can apply this amount to your mortgage principal.

For example, setting aside $100 a month for additional mortgage payments can save you quite a lot in interest over a 30-year loan period. Say you borrowed $500,000 over 30 years with an interest rate of 3.56%. Your monthly payments could be about $2,260. But if you add an extra $100 on top of that from the beginning of your mortgage, you’d end up saving nearly $25,850 in interest over 30 years.

Use the calculator below to see how much interest you’ll save by making extra payments. Enter your mortgage amount, interest rate, loan period and then the extra amount you can pay on top.

Will my lender penalize me for making extra payments?

Some lenders charge you a fee for making extra payments or for paying off your loan early. This can be an expensive punishment for trying to get out of debt faster. Check the fine print of your mortgage, speak to your lender and consider refinancing to a more accommodating mortgage.

Choose a shorter loan term

Most borrowers opt for a 30-year mortgage. This reduces the size of your monthly payments, but you end up paying more over time than a 25-year term — you paying interest for five more years. The longer you borrow money from the bank, the more they make in interest.

This is a smart option for borrowers who can afford higher monthly payments. If you can’t, then stick with a 30-year loan term and see if there are other ways to pay off your mortgage faster.

Some lenders also allow you to customize the length of your mortgage. You can choose the repayment term, generally, from eight to 30 years, that fits your budget and financial goals.

Start with a larger down payment

It’s not a realistic option for every borrower, but scraping together a bigger down payment means borrowing less. If you can, you stand to save in the long run.

Refinance to a lower rate while keeping your payments the same

Refinancing can be a good way to lower your payments and spend less on your mortgage. But refinancing could also help you get debt-free faster. The trick is to switch to a lower interest rate but keep your monthly payments the same as they were before.

It will feel like nothing has changed, but you’re actually making extra payments, so you’ll pay your debt down faster.

Check your equity before refinancing

The two assumptions we make when talking about refinancing are that you consistently pay your mortgage on time and your property value has increased. These two facts increase the equity you have in your home, making it easier to refinance.

But if your property value has fallen, or you still owe a lot on your mortgage, you might lack equity. In this case, refinancing could hurt you. If your loan-to-value ratio is below 80%, you might have to pay private mortgage insurance.

Compare more mortgage refinance lenders

Name Product Loan products offered State availability Min. credit score
Better.com
(NMLS #330511)
Better.com
Conventional, Jumbo, FHA, Refinance
Not available in: HI, MA, MN, NV, NH, VT, VA
680
Refinance your home loan using an easy online process.
Figure
(NMLS #1717824)
Figure
Refinance, Cash-out refinance
AK, AL, AZ, CA, DE, FL, GA, IA, ID, IN, KS, LA, MA, MI, MO, MS, MT, NC, ND, NE, NH, NJ, NM, NV, OH, PA, SD, TN, WA, WI, WV
620
Apply in minutes for a refinance quote, including cash-out options, that won't hurt your credit.
Axos Bank
(NMLS #524995)
Axos Bank
Conventional, Jumbo, FHA, VA, Home Equity/HELOC, Refinance
Available in all states
620
Purchase, refinance, and home equity options available with lender fees as low as $0 (restrictions apply).
LendingTree
(NMLS #1136)
LendingTree
Conventional, Jumbo, FHA, VA, USDA, Home Equity, HELOC, Reverse, Refinance
Available in all states
620
Connect with vetted home loan lenders quickly through this online marketplace.
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Compare up to 4 providers

Bottom line

You can save a lot of money by paying off your mortgage early. But if your lender charges a prepayment penalty, calculate if the penalty is smaller than the amount you’d save in interest. And if you’re still shopping around for a new home, get a mortgage with a competitive rate to save the most.

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