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How to Pay Off Your Mortgage Early

October 12, 2018 — 2 min read

Pay Off Your House Early!

What is the benefit of paying off your mortgage early? You may want to gain more equity to invest in another property. Perhaps you want to spend more on principle payments now to spend less on interest later, getting out of debt sooner. Whatever the reason, paying off your mortgage early may benefit you and your family.

You can pay off your house years earlier just by making one additional mortgage payment per year! Shave years off of your loan timeline by putting extra towards your principal now.

Here's How to Pay Off Your Mortgage Early:

1. Increase your monthly house payment by 1/12. (Divide monthly payment by 12, and pay that extra amount each month on top of your monthly mortgage.)

Ex: Your monthly payment with principal and interest is $1,500/month. $1,500/12 = $125. Your monthly payment would be $1,625

2. Make one full extra payment per year. Do this when you receive your tax refund! 3. Sign up for bi-weekly mortgage payments. By putting money towards your mortgage every two weeks, you are making 26 biweekly payments or 13 monthly payments instead of the customary 12 each year.

Make sure that when you make an extra payment towards your loan principal that you make a note that your extra money should go towards the principal and not interest on the loan.

Since you're making the equivalent of 13 monthly payments each year with any of these three options, you'll pay less total interest while lowering your principal balance at a much quicker pace. Depending on the terms of your loan, one full extra payment per year may enable you to pay for your house between three and eight years ahead of schedule!

Not only does paying off your mortgage early help you save money and invest it into other options, but there's an emotional benefit to getting out of mortgage debt earlier than your scheduled loan term. If you have bigger and better dreams in mind for your money other than paying off debt, then paying off your mortgage is a fantastic opportunity to get closer to those dreams.

Want to see how much you can shave off your mortgage debt by making early payments?

If you have questions about mortgage payments contact us today, or fill out the short form below! We are always here to help!

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