Owning a house will be one of the greatest achievements of your life. But if you want to convert it as an investment, you have to pay off the mortgage as soon as possible. 

Here are a few simple ways to pay off your mortgage early.

1. Discuss with your mortgage company 

 When you are signing a mortgage, it comes with certain terms and conditions. Even if you have enough money to pay off the mortgage quicker, you will not be able to do so. There is a penalty for that. But it is not all bad. There are many mortgage companies that allow you to make early payments and lump payments, within a limit of course. So discuss with your mortgage provider and get to know of repayment limits and devise a plan accordingly.

2. Pay the principal amount 

Many lenders allow you to pay some extra amount and mark it as ‘principal only’ which does not reflect on your interest payment. By paying some extra money for the principal amount every year, you can reduce the interest charges and can pay off the mortgage early. 

3. Make accelerated bi-weekly payment

Instead of paying the mortgage every month, split it and pay every 2 weeks. As there are 52 weeks in a year, you end up making 13 payments instead of 12 payments yearly. This way, you are not really making any budget cuts but also paying off more mortgage. 

4. Save and Pay 

If paying off the mortgage early is your first priority, whenever you are saving some money, try to use it for paying the mortgage. If you are getting a bonus or some money through other forms of savings, you can use it to pay a lump sum mortgage amount. According to an MPC survey, 15% of mortgage holders made a lump-sum payment in the past year to shorten their amortization period. You can cut down on any other monthly expense and increase the amount of monthly mortgage payment. You can even round off the mortgage payment like for eg. if you are paying $1467 as your monthly mortgage, round it up and pay $1500 every month. This might look like a very small change but can help you in the longer run. 

5. Pay the same interest rate after renew

Generally, you renew the mortgage every 5 years. Chances are there for the interest rate to be reduced. However, try to keep paying the same interest rate. This helps to pay off your mortgage early. 

Suppose you’ve got a mortgage of $350,000 that you’ll pay back over 25 years. At a 5% interest rate, your payments are $2,036 each month. When you renew your mortgage after a 5-year term, your interest rate has gone down from 5% to 4%.

For the remaining 20 years of your mortgage, you want to decide if you should pay the new minimum monthly payment of $1,872 or continue to pay $2,036 each month.

Assume the following:

  • the amount you owe on your mortgage is $309,776
  • you renew your mortgage for another 5-year term
  • your new minimum monthly payment is $1,872 each month
  • your new interest rate of 4% would remain the same for the rest of the mortgage


  Monthly payment at $1,872

(new minimum payment)

Monthly payment at $2,036

(keep the payment same)

Principal (the remaining amount you owe on your mortgage) $309,776 $309,776
Interest (the amount you pay to borrow money) $139,459 $121,536
The total amount you pay for your home $449,235 $431,312
Savings on the interest owed to your lender $0 $17,923
Number of years left to pay off your mortgage 20 years 17 years and 8 months

By keeping your monthly payments the same at the lower interest rate for the rest of your mortgage, you’d: save almost $18,000 and pay off your mortgage more than 2 years earlier

Please understand that all the options mentioned above need you to spend money. If you have other priorities such as any other debts or any other major expenses, reconsider before you spend all the money on the mortgage.