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12 Things to Do to Become Mortgage-Free Sooner

Become Mortgage-Free Sooner

Getting rid of your mortgage is one of the biggest financial goals for many people. After all, once you are mortgage-free, you’ll be able to relax, be more financially flexible, and plan for retirement sooner. Although there is no one-size-fits-all solution for becoming mortgage-free faster, there are a few things you can do to speed up the process.

1. Make larger monthly payments.

The simplest way to become mortgage-free sooner? Make larger payments than the required minimum. Of course, how much extra money you can devote to your mortgage will determine this. However, if you can pay $50 or $100 more each month, it will add up over time and help you pay off your mortgage more quickly.

Using a mortgage calculator, you can calculate how much faster you can pay off your mortgage by making larger monthly payments. But, let’s give you an example.

Let’s say that you bought a house for $250,000 and have a 30-year mortgage at 7% interest. If your monthly payment is $1,663.26 and you tack on an extra $1,000, you’ll pay off your mortgage in 4 years, 7 months sooner. Plus, you’ll save $27,179.51 in interest.

However, here’s what you’ll need to know before you make extra payments:

  • Consult your mortgage company first. Some companies may impose prepayment penalties or extra payments may only be accepted at certain times.
  • If you make an extra payment, note that you would like it to be applied to the principal balance and not to the next month’s payment.
  • Be careful not to get sucked into a mortgage accelerator program, like biweekly payments. You can accomplish the same goal with focused attention and intention.

2. When rates are low, refinance.

It is possible for mortgage rates to fluctuate over time. As such, a refinance may allow you to shorten the duration of your mortgage without significantly increasing your monthly payments if rates have fallen since you signed the mortgage.

Suppose you could reduce your repayment schedule by six years by converting your 30-year fixed loan to a 15-year loan. In this case, you will only end up paying a few hundred dollars more each month to shed that debt much sooner, making it possible to be mortgage-free by retirement by securing a low mortgage rate.

3. Make a lump-sum payment.

In the event of a windfall, like an inheritance or large tax refund, you can pay off your mortgage in one lump sum. By doing so, you would save money on interest and shorten your repayment timeline all at once.

Let’s say you inherited $10,000 and decided to throw it on your mortgage. If you have a loan of $200,000 with a 7% interest rate, you will pay it off 19 months sooner and save $21,895 in interest charges.

4. Pay down your mortgage before you buy a home.

What, wait? Hold one, let me explain.

As soon as you think about buying a house, you should start paying off your mortgage debt. By doing this, you’ll be able to get a bigger mortgage and a lower interest rate.

In addition to avoiding private mortgage insurance (PMI), saving up a 20% down payment will also save you hundreds of dollars every month.

5. Live below your means.

Clearly, living below your means is one of the best ways to reach your financial goals. In other words, you should spend less money each month than you earn.

The extra money you save or put toward your mortgage can be put towards your savings or other financial goals when you live below your means.

Of course, this is sometimes easier said than done. But, here are a couple of suggestions to free up some money for paying off your house early.

  • Budget your groceries more carefully. You probably spend the most on groceries outside of housing — especially if you have children. If possible, change stores, shop sales, and buy in-season produce to save money. And, also master the art of couponing.
  • You may want to cancel some subscriptions. Subscription services are easy to accumulate these days. So, determine which streaming services you can live without and cancel them. You can then put the money toward your mortgage.
  • Reduce your energy consumption. You can lower your monthly bills and help the environment by reducing the amount of energy you consume. The easiest way to reduce energy consumption is to unplug electronics when they’re not being used, change to LED lights, and lower your thermostat during colder months a few degrees.
  • Take a look at your insurance coverage. It may be possible to get a cheaper price on your insurance coverage if you work with an independent insurance agent who shops rates from multiple providers.

6. Live on 50% of your income.

“At the start of our marriage, we paid off $48,032 of consumer debt,” writes family finance coach Andy Hill. “Since that time, we’ve consistently lived on about 50% of our income.” In some years, the Hill family has spent more, while in others, they’ve saved more. Generally, though, they save about half and spend about half as a couple.

“It definitely helps when you have a six-figure household income,” he adds. “During our mortgage payoff process, we averaged around $170,000 per year for our household income.”

Their goal was to become mortgage-free within 5 years. “We had prepared ourselves for this reality and it wasn’t bad when we were both employed,” Andy explains. A lot of things changed when Andy’s wife Nicole left her job to stay home with our two kids.

7. Get a roommate or rent out a portion of your home.

You can generate extra income by getting a roommate or renting out a portion of your house if you have the space.

For example, you could rent out a spare bedroom for $1,000 per month if you have one. This could be used as that additional monthly mortgage payment I discussed earlier.

If you don’t want to have a roomie or tenant, you could list any extra space you have on Airbnb or Vrbo.

8. Start a side hustle.

A side hustle might be the perfect way for you to make extra cash to put toward your mortgage. Freelancing, blogging, and selling products online are all ways to make money on the side. You could also sell your wanted items on Facebook Marketplace, eBay, Decluttr, or Poshmark.

9. Get a part-time job.

A part-time job can also help you make extra money towards your mortgage if you have the time.

Working a few hours a week can add up over time, even if it’s a small amount. As an example, if you earn $20 per hour and work 10 hours per week, you could earn $2,000 more each year.

10. Ask for help from family or friends.

Your family or friends may be able to help you with your mortgage payments if you are struggling. There is a possibility that they will lend you money or give you a financial gift.

In the event that family or friends provide you with financial assistance, you should make sure to formalize it and create a repayment plan. Any future misunderstandings or conflicts can be avoided by doing this.

11. Downsize.

The idea of downsizing your house may seem a bit extreme. However, a smaller, less expensive home might be a better option if you want to pay off your mortgage faster.

Even better? You may be able to purchase your new home with 100% cash from the sale of your bigger house. But, you will still end up with lower payments even if you do have to get a small mortgage.

Remember, your goal is to eliminate that new mortgage as quickly as you can. Use the lower payments and smaller balance you get from downsizing to pay off your home faster. After all, it’s not an excuse to pocket money in the short term and defer repayment.

12. Consider government programs.

Several types of government-backed loans are available, including VA loans, USDA loans, and FHA loans. FHA loans are backed by the Federal Housing Administration, USDA loans are targeted at rural homebuyers, and VA loans are designed specifically for veterans.

A government-backed mortgage can often be more affordable than a conventional mortgage. If you are low-income, have less-than-perfect credit, or cannot afford a large down payment, they can be a good option.


What is the best way to become mortgage-free sooner?

To become mortgage-free sooner, it’s best to make extra principal payments. In order to do this, you can:

  • When you buy a home, if you make a larger down payment, you will have a smaller mortgage balance and pay less interest.
  • Make even a small increase in your monthly mortgage payment.
  • An annual lump-sum payment on your mortgage, such as a tax refund or bonus.
  • In the event that interest rates have fallen since taking out your mortgage, you may be able to refinance to a lower rate.
  • In general, the more debt you have, the more you’ll have to pay on a monthly basis. Don’t take out other debts, such as personal loans or credit cards.

How much money can I save by paying off my mortgage early?

If you pay off your mortgage early, you can save a lot of money, depending on factors such as your interest rate, loan amount, and extra monthly payments. It is possible, however, to save thousands of dollars on interest simply by making an additional payment each month over the course of your loan.

What are the other benefits of paying off your mortgage early?

Paying off your mortgage early has a number of other benefits, including:

  • A greater sense of financial freedom and flexibility.
  • The ability to invest more money for retirement or other goals.
  • Getting your monthly expenses down.
  • Increasing your credit score.

Are there any risks associated with paying off your mortgage early?

It is possible that paying off your mortgage early will cause you to lose out on investment opportunities. If your mortgage interest rate is low, investing your extra money may be more financially advantageous than paying it off early.

Refinancing your mortgage to a shorter term can speed up the repayment process. It is important to note, however, that you will likely have higher monthly payments. Additionally, you should ask your lender if there are any prepayment penalties on your current loan.

In any case, such decisions should be made on a case-by-case basis.

How do I know if paying off my mortgage early is right for me?

Depending on your individual financial situation and goals, you may want to consider paying off your mortgage early. To get personalized advice on paying off your mortgage early, you should speak with a financial advisor.

[Related: Mortgage Pre-Approval vs. Pre-Qualification – What’s the Difference?]

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CEO at Due
John Rampton is an entrepreneur and connector. When he was 23 years old, while attending the University of Utah, he was hurt in a construction accident. His leg was snapped in half. He was told by 13 doctors he would never walk again. Over the next 12 months, he had several surgeries, stem cell injections and learned how to walk again. During this time, he studied and mastered how to make money work for you, not against you. He has since taught thousands through books, courses and written over 5000 articles online about finance, entrepreneurship and productivity. He has been recognized as the Top Online Influencers in the World by Entrepreneur Magazine and Finance Expert by Time. He is the Founder and CEO of Due.

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