Saving & Spending Home & Auto

11 Strategies for Paying Off Your Mortgage Early (That Actually Work)

Paying off your mortgage early can give your budget more breathing room.

By Sarah Sharkey

Edited by Chris Kissell

Updated Feb. 11, 2025

Paying off your mortgage ahead of schedule can eliminate a significant financial burden from your life. Although it can be a challenge, getting rid of your home loan is a good way to get ahead financially.

Here are some great strategies for paying off your mortgage that actually work.

Steal this billionaire wealth-building technique

The ultra-rich have also been investing in art from big names like Picasso and Bansky for centuries. And it's for a good reason: Contemporary art prices have outpaced the S&P 500 by 136% over the last 27 years.

A new company called Masterworks is now allowing everyday investors to get in on this type of previously-exclusive investment. You can buy a small slice of $1-$30 million paintings from iconic artists, all without needing any art expertise.

If you have at least $10k to invest and are ready to explore diversifying beyond stocks and bonds,see what Masterworks has on offer. (Hurry, they often sell out!)

Make extra mortgage payments regularly

Making extra payments is a great way to boost your bank account by reducing the amount of interest you will pay over the life of your home loan. Regular extra payments can help you barrel through the remaining loan balance ahead of schedule.

Depending on your situation, you might choose to make extra payments on a monthly or weekly basis. For example, you might commit to making an extra payment of $100 or $200 each month.

Want to learn how to build wealth like the 1%? Sign up for Worthy to get ideas and advice delivered to your inbox.

Refinance into a shorter term

Refinancing your mortgage can make sense, especially if you are able to lock in a lower interest rate. As you move through the refinancing process, you can opt for a shorter loan term.

Although this might mean your mortgage payment increases, you will get out of debt faster.

Before you refinance, consider the costs of doing so. Depending on how close you are to paying off the loan, refinancing is not always worth the cost.

Make 1 extra mortgage payment a year

If you can't commit to an extra monthly payment, consider making one extra mortgage payment each year instead. Each year you make an extra payment will cut some time off your loan term.

For example, let's say you expect to receive a year-end bonus every year. When you receive the bonus, use some of those funds to make a one-time extra payment.

If you don't expect a bonus, then consider making a monthly extra payment equal to one-twelfth of the mortgage amount. For example, if your monthly mortgage payment is $1,200, then consider making an extra payment of $100 per month.

Get a free stock valued between $5 to $200

Secret: You don't need thousands of dollars to buy thousand-dollar stocks or create a diverse portfolio.

Robinhood offers a method of investing called “fractional shares.” On its own, one share of a single stock could cost a lot of money, making it difficult to diversify. Robinhood allows you to buy pieces of stock instead, so you have the option to build a diverse portfolio quickly.

Let’s say you want to invest $250, as an example.

With that amount, you could build a relatively diverse portfolio with an investment of $50 in a big tech stock, $50 in a retail stock, $50 in an energy stock, $50 in a manufacturing stock, and $50 in a bank.¹ This content is for informational purposes only, you should not construe any such information as legal, tax, investment, financial, or other advice. To get stock reward, new customers need to sign up, get approved, and link their bank account. Stock rewards shares cannot be sold until 3 trading days after the reward is granted and the cash value of the stock rewards may not be withdrawn for 30 days after the reward is claimed. Stock rewards not claimed within 60 days may expire. See full terms and conditions at <a href="https://robinhood.com/us/en/support/articles/open-account-pick-your-stock/">rbnhd.co/freestock</a>. Fractional shares are illiquid outside of Robinhood and are not transferable. Not all securities available through Robinhood are eligible for fractional share orders. For a complete explanation of conditions, restrictions and limitations associated with fractional shares, see the Fractional Shares section of our Customer Agreement. Robinhood Gold is offered through Robinhood Financial LLC and is a membership offering premium services available for a fee.

Even better news? Add a Robinhood Gold membership, and you’ll get access to 4.00% (as of 12/27/24) APY² Annual Percentage Yield. Rate valid as of April 12, 2024. To earn interest, a cash balance is needed. If you have a margin balance, there is no cash balance to earn interest. Interest rates for cash sweep and margin investing can change at any time. Fees may reduce interest earnings. on your uninvested cash³ Interest is earned on uninvested cash swept from your brokerage account to partner banks. Partner banks pay interest on your swept cash, minus any fees paid to Robinhood. As of Nov 15, 2023, the Annual Percentage Yield (APY) that you will receive is 1.5%, or 5% for Gold customers. The APY might change at any time at the partner banks' or Robinhood's discretion. Additionally, any fees Robinhood receives may vary and are subject to change. Neither Robinhood Financial LLC nor any of its affiliates are banks. All investments involve risk and loss of principal is possible. Robinhood Financial LLC (member SIPC), is a registered broker dealer. and the ability to buy and sell stocks 24 hours a day, 5 days a week.

Open and fund a Robinhood account and earn up to $200 in stock

Make bi-weekly payments

Many mortgage lenders allow you to make bi-weekly mortgage payments, which is half of your mortgage payment every two weeks.

If you make payments every two weeks, then you will end up making an extra monthly payment each year. Those funds can go a long way toward eliminating the mortgage ahead of schedule.

The best part is that many workers receive pay on a bi-weekly schedule. That means your budget might not even feel the impact of essentially making an extra payment each year.

Round up mortgage payments

Since every little bit goes a long way, rounding up mortgage payments to the nearest $100 can help you make headway on repayment.

For example, if the mortgage payment is $985, then consider rounding up your monthly payment to $1000.

Cut other expenses from your budget

After drilling into the details, you might discover that there is no room in your current budget to accelerate mortgage payments. In that case, you will need to cut out other expenses to make room for extra mortgage payments.

As you cut expenses, look at food and transportation costs to determine where to slash first. For example, you might opt to trade in your car for a more affordable vehicle.

Also consider reducing how frequently you dine out at restaurants until you have made significant headway toward the goal of paying down the mortgage.

Grow Your $$: 11 brilliant ways to build wealth after 40

Use unexpected income to make a large payment

It's tempting to splurge when you get a windfall of unexpected income. However, using those funds to make a large payment can slash your mortgage balance in a big way.

If you use extra income — such as bonuses or tax refunds — to lower your mortgage balance, then you won't have to cut into your budget for necessities.

Downsize

If you have more space than you need, then downsizing offers a way to tap into a lower mortgage balance. For example, you can use the profits from a home sale to pay off a more affordable house.

Most importantly, downsizing can give your budget some much-needed breathing room.

Use the $1 per month plan

If you have the bandwidth to increase your monthly payment by a single dollar each month, then you can eliminate the mortgage years ahead of schedule. The plan works by adding one dollar to every mortgage payment.

For example, let's say the mortgage payment is $800. In the first month, you pay $800. In the second month, you pay $801. In the third month, you pay $802.

From there, continue to increase the mortgage payment by a single dollar every month.

Earn up to a $300 bonus and grow your money with up to 3.80% APY

This powerful combination checking + savings account from SoFi® allows you to earn up to a $300 bonus with direct deposit and grow your money with up to 3.80% APY.⁴ New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Direct Deposits received during the Direct Deposit Bonus Period) OR $300 (with at least $5,000 total Direct Deposits received during the Direct Deposit Bonus Period). Cash bonus will be based on the total amount of Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 1/31/2026. See full bonus and annual percentage yield (APY) terms at <a href="http://www.sofi.com/banking#1">sofi.com/banking#1</a>. SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC. SoFi members who enroll in SoFi Plus with Direct Deposit or by paying the SoFi Plus Subscription Fee every 30 days or with $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. Members without either SoFi Plus or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Only SoFi Plus members are eligible for other SoFi Plus benefits. Interest rates are variable and subject to change at any time. These rates are current as of Jan. 24, 2025. There is no minimum balance requirement. Additional information can be found at <a href="http://www.sofi.com/legal/banking-rate-sheet">http://www.sofi.com/legal/banking-rate-sheet</a>. See the SoFi Plus Terms and Conditions at <a href="https://www.sofi.com/terms-of-use/#plus">https://www.sofi.com/terms-of-use/#plus</a>.

This is one of the top accounts we’ve seen, and offers like this can be rare. You work hard, and now it’s time to make your money work for you — with SoFi, you can grow your money with hardly any effort!

SoFi has no account fees⁵ We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at <a href="http://sofi.com/legal/banking-fees/">sofi.com/legal/banking-fees/</a> or overdraft fees⁶ Overdraft Coverage is limited to $50 on debit card purchases only and is an account benefit available to customers with direct deposits of $1,000 or more during the current 30-day Evaluation Period as determined by SoFi Bank, N.A.  The 30-Day Evaluation Period refers to the "Start Date" and "End Date" set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the "30-Day Evaluation Period"). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY.  Members with a prior history of non-repayment of negative balances are ineligible for Overdraft Coverage. and additional FDIC insurance up to $3 million on deposits is available through a seamless network of participating banks.⁷ SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per depositor per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $3M through participation in the program. See full terms at <a href="http://sofi.com/banking/fdic/sidpterms">SoFi.com/banking/fdic/sidpterms</a>. See list of participating banks at <a href="http://sofi.com/banking/fdic/participatingbanks">SoFi.com/banking/fdic/participatingbanks</a>. Plus, you can receive your paycheck up to 2 days early.⁸ Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.

How to earn up to $300: Sign up and make a direct deposit within the first 25 calendar days of the promotional period, then collect a $300 cash bonus with a direct deposit of $5,000 or more.

SoFi is a Member, FDIC. ⁷ SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per depositor per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $3M through participation in the program. See full terms at <a href="http://sofi.com/banking/fdic/sidpterms">SoFi.com/banking/fdic/sidpterms</a>. See list of participating banks at <a href="http://sofi.com/banking/fdic/participatingbanks">SoFi.com/banking/fdic/participatingbanks</a>.

Open your SoFi account and set up direct deposit

Rent out part of your home

If you have extra space in your home but don't want to downsize, then consider renting out the extra space instead.

For example, the funds you would accumulate from renting a spare bedroom could go a long way toward paying off the mortgage.

If you don't want to share space with a tenant, then consider renting out your extra storage space through platforms such as Store At My House.

Pick up a part-time job or side hustle

When you boost income, you can use the newfound funds to pay down the mortgage faster. Some ways to earn extra income are through a part-time job or building a flexible side hustle.

Finding a part-time job at a local restaurant or store might be a good fit for some. For others who need a more flexible schedule, a side hustle like pet sitting or freelance writing could be a better fit.

Bottom line

Paying off your mortgage early is one of the most dramatic homeowner money moves you can make. Plus, completing mortgage payments could significantly impact your overall financial agility.

Now you can direct your funds toward tackling other financial goals, such as building an investment portfolio or potentially cutting back on working hours.

More from FinanceBuzz:

Don't Let Home Repairs Drain Your Bank Account

Choice Home Warranty Benefits

First month free
Protection for unexpected expense
24/7 claims hotline
Network of over 15,000 technicians

Get a free quote