8 Ways to pay off your Mortgage early
1. Refinance to a 15-year mortgage
An easy way to guarantee that you'll pay off your house twice as fast is to refinance your mortgage from a standard 30-year term to a 15-year mortgage.
If you refinance, you'll typically pay a lower interest rate while making larger payments each month, you won't pay anywhere near double your current payment.
2. Refinance, but keep the same payments
People who refinance do it to reduce their monthly payments. But you can double up by reducing your interest rate and continuing to make the same monthly mortgage payment.
3. Use pay rises on your mortgage
A way to use extra cash to put towards your mortgage; apply for raises and bonuses from your job.
This strategy works best for those who get regular raises above minor cost of living adjustments.
4. Pay extra each month
You can add as little as $50 to your mortgage payment consistently to make a big difference.
You might not decide to refinance but adding a little extra each payment can make a significant difference towards your mortgage each month.
5. Use cash windfalls to pay lump sums
Instead of paying the little extra cash each month, you could pay a larger lump sum every now and then. This can be done with a cash windfall, a yearly tax refund, work bonus or inheritance.
All your payments onwards, are a little more effective, because less of the money is going towards interest.
6. Make bi-weekly payments
If you choose to make bi-weekly payments on your mortgage, you'll make an extra mortgage every year. This can cut almost five years off a typical 30-year mortgage.
7. Set a target payoff date
Setting a target payoff date allows you to organise exactly how much extra to pay each month to be mortgage free by a certain date. This is a common way to motivate yourself to pay it on time.
8. Combine methods
You don't have to select one method from the above list. Many mortgage holders can choose a few options and combine them to pay off their loan even earlier. This also saves yourself some interest and be able to pay off your mortgage early!