How to Pay Your Mortgage Off Early

Real Estate Broker/Owner with Sandra Nickel REALTORS

You may make a lot of financial investments in your lifetime, but owning a home is likely the largest investment you will ever make. Because it is such a large investment, it takes a long time to pay it off. In fact, it can feel like it takes a lifetime to finally own your home outright. But the truth is, there are ways to shorten the process so that you can pay off your mortgage sooner rather than later.

Here are some options for paying off your mortgage’s entire principal (plus interest) quicker:

  • Biweekly Payments

Most people make mortgage payments monthly. But if it’s within your budget AND your lender allows it, you can make two payments every month. When you make biweekly payments, they still must equal the amount of your required monthly payment. However, remember that every time you make a payment it goes toward the interest you’ve accrued first. By making payments every two weeks, that leaves less time for interest to increase. That means more of your money will go towards your principal balance, thus allowing you to pay off your mortgage faster. Keep in mind that not all lenders will accept biweekly payments, so be sure to check with them first.

  • Unexpected Income

Any substantial and unforeseen monetary gain is a “windfall”. Windfall income is exciting and can be used in a plethora of ways. If the idea of paying on your mortgage for 30 years, you may want to consider using windfall income to pay of your loan faster.

Examples of windfall income are:

  • Credit card cash-back rewards
  • Tax refunds
  • Inheritance
  • Lawsuit settlements
  • Property sales
  • Raises
  • Work bonuses
  • Lottery winnings

Not everyone will have windfall income during their life, but for those who do, it can be a great way to put a dent in your mortgage’s outstanding balance.

  • Refinance to a Shorter Loan Term

If paying off your mortgage faster is a goal for you, refinancing to a shorter loan term is a great way to do it. Refinancing involves paying off your existing mortgage so you can replace it with another in order to save money or pay off your loan sooner. You might be surprised to discover that changing from a 30-year to a 20- or 15-year loan will only raise your monthly payment by a few hundred dollars. So, if your financial status has improved since you first purchased your home, and your budget can withstand a larger payment, you can knock thousands of dollars in interest off the life of your loan. It’s a good idea to shop around for the best rate if you want to refinance, as you don’t have to stay with your current lender.

  • Make Extra Payments Towards Principal

The “principal” of your mortgage is the amount you borrowed and have to pay back. Your monthly payments usually include your principal, interest, insurance and taxes. You can pay off your mortgage more quickly by simply paying extra towards your principal occasionally or even making an extra, large payment towards your principal once a year. You can do this with money you have budgeted for that purpose or if your income has changed in a way that allows for it.

If you are considering options to pay your mortgage off faster, the first step to take is to speak with a mortgage banker. They have the expertise to give you the best advice for practical solutions that will work for you.

If you are in the market to buy or sell a home (or both), let me, Sandra Nickel, and my Hat Team of Professionals assist you with all your real estate needs! Call us today at 334-834-1500 and check out for more information.

Photo credits:,,

Comments (2)

Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello Sandra, I always tell buyers at closing by paying 13 payments a year they have a chance of paying off these home in 22 years.  Great blog by you!

Aug 10, 2022 10:27 AM
Kristin Johnston - REALTOR®
RE/MAX Platinum - Waukesha, WI
Giving Back With Each Home Sold!

Great information.   Thanks for sharing and enjoy your day!

Aug 30, 2022 07:35 AM