California Homes and You...: Tips for Paying Off Your Mortgage Quickly

Tips for Paying Off Your Mortgage Quickly

Purchasing a home is one of the biggest investments that most people will ever make.  While owning a home is a great way to build long-term wealth, most people will have to take out a mortgage to help finance the purchase.  While mortgages often come with 30 year terms, there are several ways that you could pay off your mortgage much more quickly.


One of the best ways to pay off your mortgage more quickly would be to make half payments every two weeks, as opposed to one monthly payment.  This strategy is ideal for people that get paid every other week, as opposed to bi-monthly.  Under this strategy, you will end up making a total of 13 mortgage payments each year.  While it may seem small, this strategy could end up cutting five or six years off of your mortgage, and save you tens of thousands of dollars in excess interest charges.


Another option for easily paying off your mortgage more quickly would be to increase your payments each year.  One of the advantages of having a long-term, fixed-rate mortgage is that your payments will never increase, and will actually increase when taking inflation into consideration.  If you are able to do so, increasing your payments each month by a small inflationary factor could help you to pay off your mortgage very quickly. Even increasing your payments three percent per year will cut ten to twelve years off of your mortgage.


The third way to pay off your mortgage faster would be to refinance when rates decline.  Mortgage rates will go up and down a lot over the course of you loan. If you are able to receive a lower rate in the future, you could take years off your mortgage.  However, you will have to resist the urge to cash out or have your payment reduced. 




Comment balloon 3 commentsRay A. Lopez • January 29 2013 07:55PM


Ray, that is great advice.  My client refinanced their mortgage and then continue to make the same payment they were paying before the refinance.  Mortgages are great, but even better when you plan it right and pay it off early.  Great post.

Posted by Ellie Penaranda, Naples Florida Real Estate - Waterfront & Beach Co (239.776.5077 Downing-Frye Realty ) about 6 years ago

Hi Ray, I've had more and more clients opt for a bi-monthly payment, it can save A LOT of money over the life of a loan. Another idea is to apply the tax refund every year and make an additional payment towards principal (it should be labeled as such).

Posted by Andrea Bedard, M.A.; REALTOR® Silver Spring, MD and beyond (Thompson Company, REALTORS®) about 6 years ago

Hi Ellie and Andrea, 

Thank you both for you comments, much appreciated and very good ideas to pass along to our clients.



Posted by Ray A. Lopez, Helping you find your Dream Home (Keller Williams Realty) about 6 years ago