4 Extra Mortgage Payment a Year : The Secret to Accelerating Home Loan Payoff




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4 Extra Mortgage Payment a Year

Buying a home is a significant financial commitment. For most individuals, obtaining a mortgage loan is necessary to fulfill their dream of homeownership. With the average mortgage term being around 30 years, the thought of paying off the debt may seem daunting. However, there is a simple strategy that can help you pay off your mortgage faster and save thousands of dollars in interest – making four extra mortgage payments a year.

The Power of Four Extra Payments

Making four additional mortgage payments a year may not seem like a significant step, but it can have a remarkable impact on your financial future. This strategy involves dividing your monthly mortgage payment by 12 and adding that amount to your regular payment every month. By doing this, you essentially make one full extra mortgage payment each quarter.

The benefit of making four extra payments a year is two-fold. Firstly, by reducing your principal balance more rapidly, you’ll pay off your mortgage earlier than the original term. Secondly, your interest savings will be substantial. Let’s delve into the advantages of adopting the four extra payment strategy:

1. Accelerated Mortgage Payoff

One of the most significant advantages of making four extra payments a year is the accelerated payoff of your mortgage. By consistently adding that extra amount to your payment, you’ll effectively shorten the life of your loan. For example, with a 30-year mortgage, you could potentially pay off your loan in around 22 years, depending on the terms and current balance.

By paying off your mortgage earlier, you’ll free up that monthly payment, enabling you to save or invest those funds for other purposes. Plus, the peace of mind that comes with being debt-free is truly priceless.

2. Interest Savings

When you make four additional mortgage payments a year, you’re not only reducing your principal balance faster, but you’re also saving a significant amount of money in interest. The more you decrease your loan balance, the less interest you’ll pay over the term.

Let’s consider an example to demonstrate the potential savings. If you have a $200,000 mortgage with a 4.5% interest rate and a 30-year term, by making four extra payments each year, you could save approximately $34,000 in interest over the life of your loan!

Implementing the Four Extra Payment Strategy

Now that you understand the advantages of making four extra mortgage payments a year, it’s time to figure out how to implement this strategy effectively. Here are some practical tips to get started:

1. Set A Budget

Begin by reviewing your monthly income and expenses to determine how much you can comfortably allocate toward the extra mortgage payments. Setting a budget will help you track your progress and ensure you stick to the plan.

2. Automate The Process

To make the extra payments consistently, consider setting up automatic payments with your financial institution. Automating the process will ensure that you don’t forget to make the additional payments and stay on track with your strategy.

3. Prioritize Your Goals

While it’s essential to make the four extra payments, it’s also crucial to prioritize your other financial goals. Evaluate your overall financial situation and consider factors such as emergency savings, retirement contributions, and any high-interest debt.

4. Communicate With Your Lender

Before implementing the strategy, reach out to your lender to ensure there are no prepayment penalties or restrictions associated with making additional payments. It’s always better to be fully aware of any potential fees to avoid unexpected surprises.

Frequently Asked Questions Of 4 Extra Mortgage Payment A Year : The Secret To Accelerating Home Loan Payoff

How Does Making Extra Mortgage Payments Benefit Me?

Making extra mortgage payments can help you save thousands of dollars in interest and shorten the term of your loan, allowing you to become debt-free faster.

What Is The Recommended Frequency For Making Extra Mortgage Payments?

It is recommended to make an additional mortgage payment at least once every year to maximize the benefits and savings.

How Do Extra Mortgage Payments Affect The Principal Balance?

By making extra mortgage payments, you directly reduce the principal balance, which decreases the amount of interest you’ll pay over the life of the loan.

Will Making Extra Mortgage Payments Change My Monthly Payment Amount?

No, making extra mortgage payments won’t change your monthly payment amount. It will only impact the overall loan term and total interest amount paid.


Paying off your mortgage early is a goal that many homeowners aspire to achieve. By making four extra mortgage payments per year, you can significantly shorten the life of your loan and save a substantial amount of money in interest. The power of making those additional payments lies in the consistent effort and discipline in sticking to the strategy. So, start making those extra payments today and enjoy the financial freedom that comes with being mortgage-free sooner!

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