Easy Ways to Pay Off Your Mortgage Early

Pay Off Mortgage-Pinnacle Capital Mortgage

Being debt-free can feel as if a burden has been lifted off your shoulders. This is precisely why more and more Americans are looking to pay off their home mortgages as quickly as possible.

Perhaps this is easier said than done, though. According to the Federal Reserve, the combined mortgage debt outstanding for all American holders was more than $14.9 trillion in Q4 2017.1 That is one frightening number, but you don’t have to contribute to it. If you chip away at your mortgage bit by bit now, you can save yourself thousands in interest down the road.

Pay Down the Principal With Extra Funds

Your regular monthly mortgage payments go toward a combination of principal, interest, insurance and taxes. However, if you can afford to make some extra payments on the principal balance alone, you’ll pay less interest in the long run.

You can go about these payments any way you want. Maybe you create a separate mortgage pre-payment savings account and funnel a portion of your paycheck into it each pay period, or maybe you spend any extra money like gifts, tax refunds and bonuses on additional mortgage payments immediately. Whatever method you choose, make sure you specify that your payment is to be applied toward the principal only. Otherwise, your lender can divvy it up however they want.

Also make sure that you are investing in your own retirement, maintaining an emergency fund and paying off more pressing debts before making extra mortgage payments. You don’t want to run out of money in an effort to be debt-free.

Make an Extra Payment Each Year

Let’s say you don’t have a ton of extra money to pay down your principal on a whim. In that case, you may need to plan more strategically for your extra payments. There are two ways you can do this:

  • Pay bi-weekly instead of monthly – By paying biweekly, you will be paying 26 times a year, which adds up to 13 monthly mortgage payments instead of 12. This may be the most realistic method for early repayment since you are less likely to miss smaller amounts of money given up at regular intervals than hundreds or thousands of dollars given up at once.
  • Save up regularly for one extra payment each year – If you aren’t a fan of putting yourself on a new payment schedule, or if you’re simply nervous to part with extra funds permanently before the end of the year, consider saving monthly. To do this, you will want to divide your normal monthly payment by 12. Save that amount each month, and you will have enough for a full monthly payment by the end of the year.


Refinancing isn’t for everyone, but it may be best for your particular financial situation. By refinancing from a 30-year mortgage to a 20-, 15- or even 10-year mortgage, you can typically get a lower interest rate, which can save you money over time.

Lower interest rates may make refinancing sound like a no-brainer, but there are also some downsides to consider. Of course, cutting your mortgage repayment plan in half logically means you will have to make higher payments each month, so you must be sure your budget can accommodate this. There are also some closing costs when you refinance, since you are putting an end to your old mortgage and beginning the process all over again. You will also be paying your bills according to a new amortization schedule, which means a larger portion of your payments will go toward interest than principal at first.

Some people forego refinancing altogether and simply pay more each month as if they did refinance. This gives you the wiggle room to miss an extra payment now and then. However, this method requires quite a bit of discipline, and you won’t get a lower interest rate.


If your current house is your forever home, this won’t be feasible, but if you are looking to get rid of your debt at all costs, downsizing can do the trick. Moving into a smaller, less expensive house will drastically reduce your mortgage. In the best-case scenario, you could make enough money off the sale to pay for your new house outright!

Finance Your Home With Pinnacle Capital Mortgage

Whether you’re considering refinancing, downsizing or buying a home for the first time, the team at Pinnacle Capital Mortgage can guide you through the home loan process. We stand by our core values of partnership, service, empowerment and excellence with every client so you fully understand your options for financing your new home.

If you are ready to apply for a mortgage, you can use our mortgage advisor search to get started. You can also contact us at one of our offices in Arizona, California, New Mexico, Oregon, Utah or Washington.