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Smart Strategies to Pay Off Your Mortgage Early


It's a goal as cherished as early retirement-—nearly everyone who buys a home for keeps dreams of the day they make their last house payment. Sadly, the majority of homeowners in the U.S. never even get close. However, there are some smart ways, some tried and true, some you may not have thought about, that will allow you to pay off your mortgage early.

Old-fashioned methods can work. The difficulty is disciplining yourself to actually follow through. Step one to paying off your mortgage early is to make a plan. Keep in mind that Rome wasn't built in a day and you won't pay off your mortgage in a few months, maybe not even in a couple of years. But here are some smart strategies to go about paying off early.

Make Monthly Savings Automatic. Saying you are setting aside $200 per month for your payoff amount (above and beyond your regular monthly payments) sounds good, but it only works if you actually do it. Open up a savings account just for your remaining balance, and make that monthly percentage automatic. Put Away Extra Money. Saving every month is a great start. But when you get that income tax refund, instead of going on a shopping spree, put it in your payoff savings account. Any extra money—a bonus, a lottery ticket win, a small inheritance—should all largely go to your payoff savings account. Ditch the Waste. All work and no play makes you a very dull boy or girl, so ditching the waste doesn't mean cutting off your cable, although that could add up to a couple thousand dollars a year. It means set up the coffee pot to brew while you get ready for work and invest in a good to-go coffee mug instead of stopping at Starbucks every morning for a cup of Joe. Imagine what you would save monthly if you didn't spend $4 every morning for a cup of coffee. ($4 x 5 = 20 x 52 = $1040 annually)

Here are some other wasteful expenses you can redirect toward paying down your principle:

  • Your Unused Gym Membership: Great if you use your gym membership. But if you don't go you could instead use that $40 or $50 dollars a month to pay down your principle. That adds up over time.

  • The Latest Gadgets: Changing your cell phone plan alone can save you around $100 per month.

  • Cook a Meal: Fast food, the movies, sit-down restaurants—they all eat up $100 a week out of your budget. That's right, you're talking potentially over $5,000 per year you could be saving just by eating in and streaming a movie instead of paying $15 per ticket at the box office.

  • Carpool and Walk: If your corner store is literally down the street, walk or ride a bike, don't drive. When you go to work, find a carpool. You'll be surprised how much money you can save on transportation with just those two ideas.

We're not suggesting you give up things you love. Keep those. But do take a close look at where you're spending and what you can re-direct toward your principle. You could ultimately save lots of money on interest paid to the bank for holding your note and you can own your home years earlier.


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Michelle Zelsman

 © 2020 Michelle Zelsman at Coldwell Banker | Realtor. Neighbor.| Home. It's more than a place to live.

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