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.

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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.

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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.

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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.

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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.

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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.

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