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.

Front of a nice house
Updated Feb. 11, 2025
Fact checked

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.

Get a protection plan on all your appliances

Did you know if your air conditioner stops working, your homeowner’s insurance won’t cover it? Same with plumbing, electrical issues, appliances, and more.

Whether or not you’re a new homeowner, a home warranty from Choice Home Warranty could pick up the slack where insurance falls short and protect you against surprise expenses. If a covered system in your home breaks, you can call their hotline 24/7 to get it repaired.

For a limited time, you can get your first month free with a Single Payment home warranty plan.

Get a free quote

Make extra mortgage payments regularly

insta_photos/Adobe senior businesswoman holding paper bill

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

sebra/Adobe business people discussion advisor concept

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

Pormezz/Adobe Businessman calculating business balance Tax deduction concept

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.

Smart Drivers, Smarter Savings
Compare car insurance rates in Ohio
See if you qualify for a lower rate in less than 2 minutes
Check Rates

By clicking the button above, I understand and agree that this site uses site visit recording technology (provided by Trusted Form, Jornaya, and Microsoft Clarity) Privacy Policy

Make bi-weekly payments

Achira22/Adobe 14th numbers on calendar

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

Iryna/Adobe Hands of woman using laptop

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

Kay Abrahams/peopleimages.com/Adobe couple reading bills

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.

Use unexpected income to make a large payment

pitipat/Adobe boss lady in suit giving salary to businessman in suit at office with laptop on table

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

Gregoire/Adobe Empty and unfurnished apartment

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

shurkin_son/Adobe managing home budget

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.

If you’re over 50, take advantage of massive discounts and financial resources

Over 50? Join AARP today — because if you’re not a member you could be missing out on huge perks. When you start your membership today, you can get discounts on things like travel, meal deliveries, eyeglasses, prescriptions that aren’t covered by insurance and more.

How to become a member today:

  • Go here, select your free gift, and click “Join Today”
  • Create your account (important!) by answering a few simple questions
  • Start enjoying your discounts and perks!

Important: Start your membership by creating an account here and filling in all of the information (Do not skip this step!) Doing so will allow you to take up 25% off your AARP membership, making it just $15 the first year with auto-renewal.

Become an AARP member now

Rent out part of your home

tab62/Adobe Home for Rent

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

Алина Бузунова/Adobe Happy woman streaming with phone

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

Charlize Davids/peopleimages.com/Adobe Family with technology and documents

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.

Choice Home Warranty Benefits

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