Pay off your home years sooner — and save thousands

You can pay off your mortgage early by making extra principal payments each month, switching to a biweekly schedule, applying lump sums (tax refunds, bonuses) to principal, refinancing to a shorter term, or rounding up your monthly payment. Even an extra $200 per month typically eliminates 4-6 years from a 30-year loan.

It is worth paying off your mortgage early if your mortgage rate is higher than the after-tax return you could earn investing instead, if you value financial peace and reduced fixed expenses, or if you are within 10 years of retirement. Most homeowners benefit from at least some acceleration.

On a typical $320,000 loan at 6.5% over 30 years, paying an extra $200 per month saves about $73,000 in interest and shortens the loan by 5 years and 2 months. The exact savings depend on your balance, rate, and remaining term.

Making one extra full mortgage payment per year typically shortens a 30-year loan by 4 to 6 years and saves tens of thousands of dollars in interest. The earlier in the loan you start, the bigger the impact.

The fastest way to pay off a mortgage combines a large monthly extra payment, biweekly payments, applying every windfall to principal, and refinancing to a 15-year term if rates allow. Disciplined homeowners using all four can pay off a 30-year loan in 12-15 years.

Yes. Paying half your monthly payment every two weeks results in 26 half-payments per year — equal to 13 full payments. That extra payment goes 100% to principal and typically saves $30,000-$60,000 in interest over the life of a typical loan.

Yes. On a typical 30-year, $320,000 loan at 6.5%, an extra $400 per month plus an annual lump sum of $3,000 cuts the timeline by approximately 10 years and saves over $130,000 in interest. Use our extra payment calculator to model your specific loan.

A mortgage prepayment penalty is a fee charged by some lenders if you pay off your loan before a specified period, typically 3-5 years from origination. Most modern conventional loans do not have them, but check your closing disclosure to confirm.

Generally, invest if your mortgage rate is below 5% and you have a long time horizon; lean toward early payoff if your rate is above 6%, you are nearing retirement, or you value the psychological relief of being debt-free. Many homeowners do both.

Most homeowners save between $50,000 and $200,000 in interest by paying off their mortgage 5-10 years early, depending on loan size and rate. Use our free calculator to see your exact savings.