What Is the Quickest Way to Pay Off a Mortgage?

Paying off your mortgage faster can save you thousands in interest.
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Making the switch from renting to owning your own place can give your finances a boost. You’re no longer paying someone else’s mortgage with your rent payments, and your home represents an investment that grows in value over time. If you’re forecasting some good income years and you can afford higher payments, there are some simple ways to pay off the mortgage faster so you’ll save thousands of dollars in interest.

Shorter Term

Fixed-rate mortgages generally come in a variety of terms that range anywhere from 15 all the way to 30 years and sometimes even 40. Payments for a 15-year mortgage are significantly higher than those of a 30-year term, but you will also spend significantly less on interest.

Take a $250,000 mortgage at a 4 percent interest rate, for example. On a 30-year term your monthly payment would be $1,193.54. Over the life of the mortgage you’d end up paying $179,674.40 in total interest ($1,193.54 x 360 payments - $250,000).

A 15-year mortgage payment would be much higher at $1,849.22, but because you are paying down your mortgage faster you are reducing your interest charges faster also. Your total interest on the 15-year mortgage would be $82,859.60 -- less than half the total interest you’d pay on the 30-year term.

Biweekly Payments

If you can only afford the payments on a 30-year mortgage, you could still pay off your mortgage faster by making biweekly payments instead of monthly payments. It works like this: take your monthly mortgage payment and divide it by two. Pay that amount every two weeks to coincide with the date you receive your paycheck. You’ll barely notice the money coming in and out of your bank account and you’ll actually be paying more money into your mortgage every year, because when you pay half your mortgage payment every two weeks, you are making 26 half payments a year, which is equal to 13 full payments instead of 12. Take your payment of $1,193.54 on a 30-year $250,000 mortgage. If you instead paid $596.77 every two weeks, your mortgage would be paid off in less than 26 years.

Extra Annual Payments

If your mortgage lender allows it, make extra lump-sum payments on your mortgage every year. If you put $5,000 in a 401(k) or traditional IRA, for example, and write off your contributions, you’ll save $1,500 in taxes if you’re in a 30 percent tax bracket. Putting that tax savings into your 30-year $250,000 mortgage every year as a lump-sum payment will rapidly reduce the principal.


If you already own a mortgage and interest rates are lower right now, you might be able to refinance at better terms if you have at least 20 percent equity in your home. Watch out for additional costs, but if you can get a better deal on a lower interest rate it might be well worth it. If you’re in a position to make higher mortgage payments you can also refinance at shorter terms and pay off your mortgage faster.

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