Why Pay Off Your Mortgage Early?
Paying off your mortgage early can save you tens of thousands in interest and free up cash for investments, retirement, or other financial goals.
5 Strategies to Pay Off Your Mortgage Faster
- 📈 Make Biweekly Payments – Splitting payments saves on interest.
- 💰 Round Up Your Payments – Adding $50-$100 extra each month shortens the term.
- 🛠 Apply Windfalls & Bonuses – Tax refunds and work bonuses can go toward the principal.
- 🔄 Refinance to a Shorter Term – A 15-year mortgage reduces total interest paid.
- 📑 Avoid Lifestyle Inflation – Keep mortgage payments steady as income increases.
How Extra Payments Save You Money
Here’s an example of how extra payments can cut years off your loan:
| Extra Monthly Payment | Years Saved | Total Interest Saved |
|---|---|---|
| $100 | 5 years | $26,000 |
| $250 | 9 years | $55,000 |
| $500 | 12 years | $85,000 |
Does Paying Off a Mortgage Early Hurt Credit?
No, but it may slightly lower your credit mix, since mortgage debt improves your credit score. However, the long-term financial savings outweigh any credit dip.
The Bottom Line
Paying off your mortgage early reduces financial stress and boosts your long-term financial freedom.
“Even small extra payments can make a huge difference in cutting years off your mortgage.”
— Sarah Thompson, Financial Advisor
Frequently Asked Questions
Is there a penalty for paying off a mortgage early?
Some lenders charge a prepayment penalty—check your loan terms.
What’s the best way to pay off a mortgage early?
Biweekly payments, extra principal payments, and windfall contributions help reduce loan term.
Should I pay off my mortgage or invest?
Compare mortgage interest vs. potential investment returns—higher returns may favor investing.