How to pay off your mortgage faster

Key takeaways

• Paying down a mortgage faster requires balance. Extra payments, refinancing and debt‑repayment strategies can reduce interest costs, but homeowners should maintain emergency savings and retirement contributions.
• Not all strategies fit every borrower. Options such as bi‑weekly payments, refinancing into a shorter term or downsizing depend on interest rates, home equity, income stability and how long you plan to stay in the home.
• Details matter before accelerating payments. Homeowners should confirm how extra payments are applied, review loan terms for rare prepayment restrictions and account for transaction costs before committing additional cash.

The benefits of paying off your mortgage early can include greater financial flexibility and reduced long‑term debt. Eliminating your monthly mortgage payment ahead of schedule can lower the amount of interest paid over the life of the loan and free up cash that can be redirected toward other priorities, such as retirement savings, real estate investments or general financial security.
Below are several ways homeowners can position themselves to pay off a mortgage sooner, and what to consider before accelerating payments.

The first step toward achieving nearly any major financial goal is laying a solid financial foundation. That typically starts with creating and following a budget that tracks monthly income and expenses.

"Creating a budget is absolutely critical and can be easily organized," said Emily Irwin, head of Wells Fargo Advice Center. She suggested using a budgeting app or even a spreadsheet to organize and track all incoming funds and expenses.

Ideally, this process helps identify areas where costs can be reduced, making it easier to free up cash that can be redirected toward increasing your mortgage payments.

As part of that review, it's also important to address any high-interest debt such as credit cards or personal loans. Paying those balances down first can improve overall cash flow and make it easier to accelerate mortgage payments later. 

"Tackling high-interest debt, like credit cards or personal loans, is smart since those can drain your finances," said Cliff Ambrose, founder and wealth manager at Apex Wealth.

While establishing a budget and eliminating debt are key steps, you should continue to fund your retirement savings. This is not an area where you'll want to cut costs if it can be avoided.

"Don’t forget to pay yourself now for your future," said Irwin. "Retirement savings contributions, which can grow exponentially with compounding and company matches, typically should not be foregone in lieu of aggressively paying down your mortgage. For most Americans, eliminating a future income stream typically would carry more risk."

Once your finances are in order, there are several approaches homeowners commonly use to pay down their mortgage faster.

One of the most straightforward options is making extra mortgage payments. This can include making one additional monthly payment each year or paying half of your monthly payment every two weeks. Over the course of a year, either approach results in the equivalent of 13 monthly payments instead of 12.

"The average homeowner makes mortgage payments once per month — that’s 12 payments per year," said Felton Ellington, community lending manager at Chase Home Lending. "Even a small change, like moving to biweekly payments, can have a positive impact. In this example, you’d end up making 26 payments, or the equivalent of 13 months. Put simply, you’d be making one extra payment every year."

Before making extra payments, homeowners should check with their loan servicer to confirm that additional funds will be applied directly to the principal balance and not credited toward future payments. Prepayment penalties are rare on most modern mortgages, but reviewing the loan terms can help avoid surprises.

Other options include rounding up monthly payments or applying windfalls such as bonuses or tax refunds directly toward the mortgage principal.

Refinancing is a commonly used approach to revise the terms of a mortgage. The process involves applying for a new mortgage to pay off your existing mortgage with a lump sum. Ideally, refinancing means you can obtain a lower interest rate, a smaller monthly mortgage payment or a shortened loan term. The result should allow you to repay the loan faster. You may also consider opting for a 15-year mortgage, which typically carries a better interest rate than a 30-year conventional loan.

"Many homeowners refinance their mortgage loans when rates go down to pay a lower interest rate on their existing loan balance going forward," said Aaron Craig, vice president of mortgage and indirect sales for Georgia's Own Credit Union. "However, if you are looking to pay off your mortgage earlier, refinancing to a shorter term and a lower interest rate could be a great option. In many scenarios, refinancing is a great way to save some money and get your loan paid down faster."

Before proceeding with a refinance, evaluate the costs associated with this step to ensure that you are saving money. Closing costs, for instance, can be anywhere from 2% to 5% of the total loan amount. 

On a $400,000 mortgage, you may spend between $8,000 and $16,000 on closing costs. Be sure you plan to stay in the home long enough to justify this type of expense. You'll also want to compare the interest rate on your new loan with your existing loan to ensure it's more competitive.

The snowball method focuses on paying off your smallest debt first, regardless of interest rate, to build momentum. Once that balance is eliminated, you roll the payment you were making into the next smallest debt. The process repeats until all outstanding debts are paid.

This approach can be most effective for borrowers who benefit from quick wins and motivation as seeing balances disappear early can make it easier to stick with a repayment plan. 

The avalanche method prioritizes debts with the highest interest rates, aiming to minimize the amount of interest paid over time. Under this approach, you direct extra payments toward the highest‑rate balance first while making minimum payments on the rest.

After that debt is paid off, you move to the next‑highest interest rate, applying the same strategy. As balances fall, the money freed up from previous payments can be used to accelerate repayment of remaining debts.

The primary benefit of the avalanche method is efficiency: By tackling the most expensive debt first, borrowers can reduce interest costs more quickly and potentially pay off debt sooner overall.

Beyond refinancing, making extra payments and using structured debt‑repayment strategies, homeowners may have other options for paying off a mortgage ahead of schedule.

One possibility is downsizing — selling your current home and purchasing a less expensive property with a smaller mortgage. Before taking that step, homeowners should weigh the financial and lifestyle trade‑offs, including moving costs, interest rates, property taxes, insurance, transaction expenses and whether a smaller living space and location are a good fit.

In the right market, this effective step can save you hundreds of dollars per month on your mortgage payment. If you need deeper insights into your local market, consult your real estate agent and request a comparative market analysis for your current home and the smaller options that you’re considering.

"A lot of people are kicking around the idea of selling their home since prices are so high, then downsizing and buying a less expensive and smaller new home," says Craig. "If done right, this can be an effective strategy, if your new mortgage loan amount will be significantly less than your current mortgage amount on your current home. With newfound equity from home prices going up in recent years, this is a real possibility."

Another way to accelerate mortgage repayment is by increasing income. That could include taking on a side hustle, negotiating a raise or pursuing a promotion. Any additional income can be directed toward mortgage payments to help reduce the loan balance more quickly. 

Regardless of the strategy, it’s important to keep your broader financial picture in mind. Devoting all available cash to paying off a mortgage could leave little room for emergencies, potentially forcing homeowners to rely on credit cards or other high‑interest debt to cover everyday expenses.

When approached thoughtfully, paying off a mortgage well ahead of schedule can provide both short‑ and long‑term benefits, including greater cash flow and reduced interest costs.

“Paying off your mortgage early can offer both financial and lifestyle advantages,” said Graham Cottrell, a broker with Singletrack Mortgage. “One of the biggest benefits is the interest savings over the life of the loan. Once the mortgage is paid off, a significant portion of monthly income is freed up for other priorities.”

If you need further guidance on how to best accomplish this goal, consider contacting a financial expert or advisor who can examine your finances and develop a comprehensive strategy.

This story was updated April 17.