Best Way to Pay down Mortgage : Key Strategies for Accelerated Repayment




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Best Way to Pay Down Mortgage

If you’re a homeowner with a mortgage, you may have wondered about the best way to pay it down. With so many strategies available, it can be difficult to know which one is right for you. In this article, we will explore some of the most effective ways to pay off your mortgage, allowing you to save money and become debt-free sooner.

1. Make Extra Payments

One of the simplest and most effective ways to pay down your mortgage is by making extra payments. By contributing more than your required monthly payment, you can significantly reduce the interest you owe over time. Even a small increase in your monthly payment can make a big difference in the long run.

Consider increasing your payment amount each month, even if it’s just by a small percentage. Over time, these additional payments can add up, allowing you to pay off your mortgage faster and save thousands of dollars in interest.

2. Bi-Weekly Payments

Another strategy to consider is switching to bi-weekly payments. Instead of making one monthly payment, divide your mortgage payment in half and pay it every two weeks. By doing this, you’ll end up making 26 half payments a year, which is the equivalent of 13 full payments.

Since there are 52 weeks in a year, this strategy allows you to fit an extra full payment into the year. Not only does it help you to pay off your mortgage faster, but it also reduces the amount of interest you’ll pay over the life of your loan.

3. Refinance to a Shorter Term

If you’re currently on a long-term mortgage, such as a 30-year loan, consider refinancing to a shorter term, such as a 15-year loan. While your monthly payment may increase, a shorter term can save you a significant amount of money in interest.

While the monthly payment might be higher, the overall amount paid towards interest is reduced because the loan is paid off in a shorter timeframe. This option is well-suited for borrowers who are in a better financial position since it requires a higher monthly payment.

4. Utilize Lump Sum Payments

If you come across some unexpected money, such as a work bonus, tax refund, or inheritance, consider using a portion of it to make a lump sum payment on your mortgage. These extra payments can have a substantial impact on reducing your principal balance, which in turn lowers the overall interest paid over the life of the loan.

Check with your mortgage lender to understand their policies regarding lump sum payments. Some lenders may have restrictions or penalties for additional payments, so be sure to clarify the terms before making any extra payments.

5. Take Advantage of Windfalls

Just like lump sum payments, windfalls can provide you with a great opportunity to pay down your mortgage faster. Whether it’s an unexpected inheritance, a lottery win, or a significant financial gain, consider allocating a portion of it towards paying off your mortgage.

While it may be tempting to spend windfalls on other things, using them to reduce your mortgage debt can bring you long-term financial benefits. By applying windfalls directly to your principal balance, you can significantly cut down the remaining term of your mortgage and save a substantial amount on interest.

Frequently Asked Questions Of Best Way To Pay Down Mortgage : Key Strategies For Accelerated Repayment

How Can I Start Paying Down My Mortgage Faster?

To start paying down your mortgage faster, consider making extra payments, refinancing to a shorter term, or using bi-weekly payments.

Is It Better To Pay Down Mortgage Or Invest?

It depends on your financial goals. Paying down your mortgage provides security, while investing offers potential for higher returns.

What Are The Advantages Of Paying Down Mortgage Early?

Paying down your mortgage early can save you money on interest and provide financial freedom sooner.

Should I Make Extra Mortgage Payments Monthly Or Annually?

Making extra mortgage payments monthly is usually more beneficial as it reduces interest charges sooner.


Paying down your mortgage faster not only gives you peace of mind but also saves you money in the long run. By using these strategies like making extra payments, switching to bi-weekly payments, refinancing to a shorter term, utilizing lump sum payments, and taking advantage of windfalls, you can effectively reduce your mortgage debt and become mortgage-free sooner.

Remember, always assess your financial situation and choose the strategies that align with your goals and capabilities. Consult with a mortgage professional for personalized advice to determine which approach is best for you.

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