How to Pay Off Your Mortgage Faster: Practical Steps

Want to pay off your mortgage faster? Explore practical steps and tips to accelerate your mortgage payoff. Learn more to achieve financial freedom sooner.

April 5, 2024
How to Pay Off Your Mortgage Faster: Practical Steps

Buying a home is a major accomplishment, both personally and financially. It marks the start of a new chapter, even the realization of a lifelong dream. For many Americans, it’s also the first move toward true wealth accrual –– with the National Association of Realtors reporting that the median value of a primary residence is ten times that of the average family’s investment portfolio.1 For all of its excitement, becoming a homeowner can also be daunting, especially if you’re looking at 15-year, 20-year, or 30-year home loan terms and thinking about what your life (and the world) will look like when you make that final payment. 

But just because you signed on for a 30-year mortgage doesn’t mean you have to take the full three decades to pay it off. In conversations with our real estate partners, we have heard countless stories of American homeowners deploying smart strategies to achieve their financial goal of paying off their mortgages early. Some are audacious, others are deceptively small, and some have even relied on alternative methods. 

Below, we answer your question of “how to pay off my mortgage faster” and explain the benefits of getting rid of mortgage debt sooner.   

Benefits of Paying Off Your Mortgage Early

The primary advantage of paying off your mortgage early is, well, that your mortgage is paid off early. But within this obvious benefit lies a myriad of other benefits –– impacting your overall financial situation, your state of mind, and your life. Let’s explore the wealth of benefits that arise when you pay off your mortgage early. 

1. Financial Savings

Most notably, paying off your mortgage early can dramatically reduce the interest payment over the life of the loan, whether you pay it off five years early or cut it in half. At the time of writing, the average mortgage rate is just under 7 percent at 6.81.2 On a 30-year fixed-rate loan for a $350,000 home, the mortgage interest alone equates to more than the cost of the home at $381,000 (and change). If paying for your home twice is of little interest to you, paying off your mortgage faster can mean major savings. 

Let’s continue using the above example. With 15 years left on the loan, beginning to make an additional monthly payment of roughly 20 percent of the mortgage can trim four years and $45,000 off the repayment horizon. Start even sooner at 8 years into the loan, and both the time savings and financial savings double. No matter how early you begin, any work toward paying off your mortgage faster goes a long way. Discover more on how to lower your monthly mortgage payment.

2. Increased Cash Flow

As we’ll soon discuss, those wondering how to pay off your mortgage faster will find that it requires both dedication and sacrifice. Once the mortgage is paid off, however, the monthly payments (and bonus payments) that were once earmarked for your mortgage can now be directed to other expenses. This increased cash flow can help create more breathing room in your budget for things like travel, investment opportunities, or even early retirement. Plus, while you can legally rent out your home without owning it outright, paying off your mortgage means that not a single cent of the rental income you earn will have to go toward rent. No matter your lifestyle or goals, the freedom from a monthly mortgage payment opens up a world of possibilities. 

3. Enhanced Financial Security

A home is a valuable asset. And in the right circumstances, owning your home outright can increase your financial security. This is especially true in times of economic uncertainty or personal financial stress –– when having one less major bill to worry about is reassuring at least and a lifesaver at most. Without the burden of a mortgage, you're in a far better position to weather financial storms like job loss, unexpected medical expenses, or other random occurrences that would otherwise erode your emergency fund.

4. More Leverage 

So, can you negotiate mortgage rates? Believe it or not, your home is a tool to be wielded –– if you know how to use it right. Your home equity, in particular, can be a valuable asset. Let’s say you want to tackle an extensive home renovation but don’t have the potentially tens of thousands of dollars it’ll take to get the job done lying around. You could apply for a personal loan or run up your credit card at a double-digit APR. Or you could leverage your home equity via a home equity loan or home equity line of credit (HELOC.) 

With either of these, you can borrow money at a potentially far lower interest rate while simultaneously elevating your home’s value. Do you need to pay off your mortgage to access these tools? No, but the more equity you have, the better your mortgage loan terms will be.3 

5. Emotional Peace of Mind

Many of the benefits of paying off your mortgage contract early can be calculated. The emotional advantages of early loan repayment cannot. Paying off your mortgage early is a significant accomplishment worth celebrating. It’s a testament to your commitment and patience. And, for many homeowners, it’s the feeling that an immense weight has been lifted. The psychological benefits of paying off your mortgage early can’t be measured, but an argument can be made that the emotional freedom from a mortgage far outweighs the financial perks of early repayment.  

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Ways to Pay Off Your Mortgage FasterExtra Payments: The Key to Reducing Mortgage Term

With the benefits of paying off your mortgage early clearly outlined, let’s move on to the strategies that allow you to do so. One of the most straightforward ways to pay off your mortgage faster is by making additional payments, but there are many ways to go about this. 

1. Bi-Weekly Payments

Most mortgage payments are monthly, totaling twelve a year, every year, for the full life of the loan. With bi-weekly payments, however, you split these payments in half and make them every two weeks instead. Half the payment amount but twice the installments means they would just zero each other out, right? Not quite. With 52 weeks in a year, you’ll make 26 payments per annum –– totaling 13 full mortgage payments. One extra payment a year may go largely unnoticed, yet it can shave years off your mortgage and save you tens of thousands of dollars in interest.   

2. Round Up Payments

Splitting your mortgage in half and doubling your payments can feel too complicated for some homeowners, who elect instead for the simplest approach possible: keeping a standard payment schedule while rounding up on each payment. Of course, the earlier you deploy this strategy, the more effective you’ll be. On a $350,000, 30-year mortgage, rounding up $50 monthly will save you nearly $40,000 in interest and help you pay off your home two years early. At $100, you save $68,000 and pay off your 30-year loan in just 26-and-a-half years.4 So, if you’ve got room in your budget for a nice meal out or a splurge shopping trip, you can funnel that extra cash toward potentially life-changing interest savings.   

3. Bonus Payments

Not every method of early mortgage payoff has to be strategic and regimented. In fact, some homeowners find that the best path toward paying a home off early is to simply throw extra money at a mortgage whenever possible. Things like work bonuses, tax refunds, scratch-off winnings, or other unexpected windfalls can allow you to make an extra principal payment and reduce your repayment horizon. Even a single bonus payment can help you pay off your mortgage early. But for added effectiveness, consider working these bonus payments into your budget –– ensuring at least a portion of every extra dollar earned goes toward this cause.  

4. Payments Toward the Principal

Your monthly mortgage payment will be a blend of the loan’s principal and any interest incurred while servicing the loan. You’ll be on the hook for the interest with your primary payments, but you can elect to make additional payments directly toward the principal. The benefits of this approach are twofold: you lower the balance, thus reducing the amount of interest you’ll owe before it can accumulate.5 This can be a highly effective strategy for reducing your mortgage term, but you’ll want to explore any potential prepayment penalties before pursuing this approach. 

5. How Sale-Leasebacks Can Help Accelerate Your Mortgage Payoff

Budgets, lump-sum payments, and shorter loan terms are proven methods for quicker mortgage repayment, but they’re far from the only ones. Yet another is Truehold’s sale-leaseback, which allows you to leverage your home equity to pay off your mortgage. But, unlike a traditional sale, you can continue living in the home as a renter –– now free from your mortgage and the responsibilities of homeownership. For homeowners who want to pay off their homes as quickly as possible, this approach is especially effective.

Refinancing to a Shorter Term

Extra payments are one way of shortening your loan term, but many homeowners have found that the most direct way to pay off a mortgage faster is by refinancing the mortgage to a shorter term. So, can you refinance a fixed rate mortgage

Refinancing your 30-year mortgage to a 20-, 15-, or 10-year mortgage can bring with it lower interest rates –– albeit significantly higher monthly payments.6 But while refinancing to a shorter term can raise your monthly payments considerably, you’ll be on the fast track toward full ownership of your home while dramatically reducing the amount you pay in interest. 

When considering refinancing to pay off your mortgage faster, first ask yourself: 

  • If you can afford a larger monthly payment –– now and in the long term
  • If refinancing will mean making financial sacrifices elsewhere
  • If you’re planning to move soon

Depending on your answers to the above, refinancing may or may not be the right choice for you. 

Utilizing Lump-Sum Payments

We briefly touched on lump-sum payments earlier, but this method of paying off your mortgage faster is worth a closer look. In summary, lump-sum payments see you apply a sizeable chunk of cash directly toward your mortgage –– generally toward the principal. These lump-sum payments can come from several places. Bonuses and tax refunds tend to be some of the more common ones, but the truth is that anything outside of your regular budgeted income can go toward your goal of early repayment. 

Lump-sum payments can be a great way to pay off your mortgage early, but they can also help you do what is known as recasting. By recasting your mortgage, you leverage lump-sum payments to lower your monthly payment while keeping the same repayment timeline.7 This can be a valuable strategy for homeowners who may not expect regular windfalls, but want their unexpected income to have a lasting impact by lowering future mortgage payments. If you wish to pay off your mortgage faster or reduce the amount you pay each month, lump-sum payments can help. 

Budget Adjustments for Faster Repayment

Infrequent, lump-sum payments from bonuses or tax refunds are highly effective. But for most Americans, the path toward paying off a mortgage early is paved with daily habits that enable incremental progress. These seemingly small actions can make a big difference, and you might find that adjusting your budget will be the key to getting out from under your mortgage in record time. 

Prioritize Spending

It can be highly challenging to make financial progress without getting your priorities straight. If you’re looking to pay off your mortgage faster, start by evaluating your spending habits and identifying areas where you can cut back. This could be morning cups of coffee from Starbucks, trips through the drive-thru, or monthly service fees for streaming platforms you hardly use (or forgot about entirely). Get your priorities sorted and be diligent about your spending. Chances are you’ll find extra cash that can be put to good use. 

Increase Income

With many Americans looking to earn extra cash, the term “side hustle” seems to have earned a permanent place in our collective vocabulary. For you, a side hustle can be the key to paying off your mortgage early –– saving thousands of dollars in interest while earning a few extra. Get creative when thinking about ways to increase your income, whether through a lucrative side gig, working overtime, or simply pursuing higher-paying opportunities. The extra income you earn can be directly funneled toward your loan principal, accelerating the payoff process. 

Should you take this approach, however, be mindful to avoid the “lifestyle creep” that can come from the additional income, instead focusing on your long-term goals and the luxury of being mortgage-free. 

Find a Budget and Stick to It

To give yourself the greatest chance of success at paying your mortgage off faster, you’ll want to create a thoughtful budget you can stick to –– then stick to it. With a comprehensive budget, you can ensure every dollar you earn has a purpose while eliminating expenses that don’t serve your long-term goals or bring you worthwhile joy. The secret to sticking to your budget will be balance: challenge yourself to save wherever possible without entirely eliminating life’s pleasures. Somewhere in the middle, you’ll find a straight line toward paying off your mortgage faster. 

Implementing Your Payoff Strategy

From the easy to the audacious, there are many ways to pay off your mortgage faster. But no matter which you choose, you’ll only be effective if you commit to a strategy and stick with it, keeping sight of your ultimate goal. With diligence, patience, and unwavering commitment, you’ll find that paying your home off early is not just possible –– it’s attainable. 

Homeowners in seven states (and counting) have successfully used Truehold to pay off their mortgages early. Join them by connecting with one of our Truehold advisors and get a cash offer on your home within 48 hours. 


  1. National Association of Realtors. Single-family Homeowners Typically Accumulated $225,000 in Housing Wealth Over 10 Years. 
  2. Bankrate. Compare current mortgage rates for today. 
  3. Bankrate. How to shop for a HELOC: 10 ways to get the best HELOC rate. 
  4. Mortgage Payoff Calculator.
  5. Rocket Mortgage. Can I Make Principal-Only Payments On My Mortgage? 
  6. Consumer Financial Protection Bureau. Understanding loan options.
  7. The Balance. What Happens If You Make a Lump-Sum Payment on Your Mortgage? 

Nicolas Cepeda headshot
Written by
Nicolas Cepeda
Financial Analyst at Truehold - A Specialist in Real Estate Finance
Nicolas Cepeda specializes in financial analysis and strategic portfolio management, with a keen focus on innovative residential real estate solutions. He leverages this expertise to cover pertinent topics in the real estate and financial sectors.
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Truehold's blog is committed to delivering timely and pertinent insights in real estate and finance, purely for educational and informational purposes. Crafted by experts, our content is thoroughly reviewed to guarantee its accuracy and dependability. Although designed to enlighten and engage, our articles are not intended as financial advice and should not be the sole basis for financial decisions. Our stringent editorial practices ensure the integrity of our content, empowering our readers with valuable knowledge.

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