Best Way to Pay down a Mortgage: Smart Strategies for Accelerated Repayment




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Best Way to Pay down a Mortgage

Are you looking for the best way to pay down your mortgage quickly and save money in the long run? It’s a goal that many homeowners share, and fortunately, there are several effective strategies to consider. In this article, we will explore the top methods for paying down your mortgage faster, along with some helpful tips to help you stay on track.

1. Make Extra Payments

One of the most straightforward ways to pay down your mortgage faster is by making extra payments. By increasing your monthly payments, you can reduce the principal balance more quickly, resulting in significant interest savings over time. Even a small extra amount each month can make a difference and shorten the lifespan of your mortgage.

Tip: Consider setting up bi-weekly payments instead of monthly payments. This can help you make an extra full payment each year, accelerating your mortgage payoff even further.

2. Refinance to a Shorter Term

If you currently have a 30-year mortgage, refinancing to a shorter-term, such as a 15-year mortgage, can be an excellent option. While your monthly payments may increase, you will benefit from a lower interest rate and pay off your mortgage in half the time. This strategy can save you thousands of dollars in interest payments.

Tip: Use a mortgage refinance calculator to compare different loan terms and determine the potential savings before making a decision.

3. Make a Lump Sum Payment

If you come into a windfall of cash, such as an inheritance or bonus, consider making a lump sum payment towards your mortgage. This can significantly reduce your principal balance and help you pay off your mortgage sooner. However, be sure to check with your lender for any prepayment penalties.

Tip: Before making a lump sum payment, evaluate your financial situation and determine if it’s the best use of your funds. Ensure you have sufficient emergency savings and consider other financial goals.

4. Take Advantage of Bi-Weekly Mortgage Programs

Some lenders offer bi-weekly mortgage programs that allow borrowers to make half the monthly payment every two weeks. By doing this, you end up making 26 half-payments (equivalent to 13 full payments) in a year instead of the usual 12. This can help you pay off your mortgage more quickly and save on interest.

Tip: Confirm with your lender if they offer a bi-weekly mortgage program or consider online services that can help you set up automatic payments.

5. Apply Extra Cash to Your Principal

Whenever you come across unexpected cash, like a tax refund or work bonus, consider applying it directly towards your mortgage principal. This will help reduce your overall balance, which in turn can save you money on interest and speed up your mortgage payoff.

Tip: Aim to make at least one extra principal payment each year to make a notable impact on paying down your mortgage faster.

6. Consider Mortgage Recasting

Mortgage recasting allows you to make a lump sum payment towards your mortgage and then recalculate your monthly payments based on the reduced principal balance. While not all lenders offer this option, it can be a useful technique to reduce your monthly payments while still paying off your mortgage early.

Tip: Contact your lender and inquire about mortgage recasting to see if it’s a viable option for you.

Frequently Asked Questions On Best Way To Pay Down A Mortgage: Smart Strategies For Accelerated Repayment

How Can I Pay Down My Mortgage Faster?

To pay down your mortgage faster, consider making biweekly payments, increasing your monthly payments, or making extra payments towards the principal.

Is It Better To Pay Down Mortgage Or Invest?

It depends on your financial goals. Paying down your mortgage reduces interest expenses, while investing can potentially yield higher returns.

What Is The Difference Between Paying Extra On Mortgage Principal And Refinancing?

Paying extra on mortgage principal reduces the principal balance, while refinancing replaces your existing mortgage with a new one, potentially offering lower interest rates or different terms.

Should I Pay Off My Mortgage Early?

Paying off your mortgage early can save you interest expenses and provide a sense of financial security, but consider other financial goals and potential investment opportunities.


Paying down your mortgage quickly is a smart financial goal that can save you thousands of dollars in interest payments over the life of your loan. By implementing one or multiple strategies from the list above, you’ll be on your way to becoming mortgage-free sooner than you might have thought possible. Remember to consult with your lender and consider your financial situation when deciding which method is right for you.

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