Paying off a mortgage early can help you save thousands of dollars in interest and give you financial freedom. Here are some strategies to help you pay off your mortgage early.

  1. Make extra payments

One of the most effective ways to pay off a mortgage early is to make extra payments. You can make an extra payment each year or each month, which can help you pay down the principal of the loan faster. For example, if you have a 30-year mortgage with a $200,000 balance and a 4% interest rate, making an extra $100 payment each month can help you pay off your mortgage 5 years and 11 months earlier and save over $26,000 in interest.

  1. Refinance to a shorter term

Refinancing your mortgage to a shorter term, such as a 15-year mortgage, can help you pay off your mortgage earlier. While your monthly payments may be higher, you’ll pay less in interest over the life of the loan. For example, if you have a 30-year mortgage with a $200,000 balance and a 4% interest rate, refinancing to a 15-year mortgage with a 3% interest rate can help you pay off your mortgage 15 years earlier and save over $82,000 in interest.

  1. Make biweekly payments

Making biweekly payments can also help you pay off your mortgage faster. Instead of making one monthly payment, you can make biweekly payments, which will result in 26 half payments each year, or 13 full payments. This can help you pay off your mortgage faster and save on interest. For example, if you have a 30-year mortgage with a $200,000 balance and a 4% interest rate, making biweekly payments can help you pay off your mortgage 4 years and 2 months earlier and save over $14,000 in interest.

  1. Increase your monthly payments

If you can afford it, you can increase your monthly mortgage payments. This will help you pay down the principal faster and reduce the amount of interest you’ll pay over the life of the loan. For example, if you have a 30-year mortgage with a $200,000 balance and a 4% interest rate, increasing your monthly payment by $200 can help you pay off your mortgage 8 years and 9 months earlier and save over $47,000 in interest.

  1. Make lump sum payments

If you receive a windfall or bonus, consider making a lump sum payment towards your mortgage. This will help you pay down the principal faster and reduce the amount of interest you’ll pay. For example, if you have a 30-year mortgage with a $200,000 balance and a 4% interest rate, making a $10,000 lump sum payment can help you pay off your mortgage 3 years and 3 months earlier and save over $11,000 in interest.

In conclusion, paying off a mortgage early can help you save thousands of dollars in interest and give you financial freedom. By making extra payments, refinancing to a shorter term, making biweekly payments, increasing your monthly payments, and making lump sum payments, you can pay off your mortgage earlier and achieve your financial goals. Search online for a simple mortgage calculator such as mortgage calculator. Remember to check with your lender to ensure that there are no prepayment penalties and to confirm the best approach for your specific situation.