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Simple Trick To Pay Off Your House in Half the Time (It’s Genius)

There are several clever ways to pay off your mortgage early. Most people understand that refinancing your mortgage can lower your monthly payment and interest rate, but that’s different from paying off your mortgage early. We want the mortgage gone.

The trick to paying off your mortgage is by making additional principal-only payments.

There are two primary ways to eliminate your mortgage faster by making extra payments.

One of the easiest ways to pay down your mortgage faster is by switching your payment schedule to bi-weekly (in other words, two payments a month instead of one). Over a year, you’ll make one additional mortgage payment, reducing the term of your mortgage.

Switch Your Payments to Bi-weekly

This may not seem like a lot, but over a 30-year mortgage, making 30 additional payments will shrink your mortgage term by several years. It won’t cut your mortgage in half, but it will save you interest by eliminating your mortgage years sooner.

The second way to pay down your mortgage sooner is by making principal-only lump sum payments yearly. These payments can be made monthly or annually, depending on your financial situation.

Make Extra Lump-sum Payments During the Year

For instance, taking a $10,000 bonus check from work and making an additional principal payment on your mortgage instantly reduces your balance by $10,000.

If this sounds like a good plan, consider setting up an automatic bank transfer monthly to make an extra principal-only payment. Paying an additional $250 or $300 a month will reduce your mortgage term by many years. The more money you pay, the shorter your mortgage term becomes.

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