Tips to Pay Off Your Mortgage Faster: 10 Proven Strategies for 2025

Published: October 29, 2025 | Updated: November 8, 2025

Paying off your mortgage earlier frees up cash and reduces the total interest you pay. The following strategies are practical and commonly used by homeowners to shorten loan terms without breaking their budgets. In 2025, with mortgage rates hovering around 6-7%, accelerating your payoff can save tens of thousands of dollars in interest over the life of your loan.

1. Make Extra Principal Payments Monthly

Adding a modest extra amount each month directly reduces the loan balance. For example, adding $100 to a 30-year, $300,000 mortgage at 6.5% can save over $30,000 in interest and shave 3-4 years off the term. The key is consistency — even small amounts compound over time.

How it works: When you make an extra payment, specify that it goes toward principal, not future payments. This immediately reduces your outstanding balance, which means less interest accrues each month going forward.

Use our mortgage calculator to see the exact savings for your loan amount and interest rate. You'll be surprised how much even $50 extra per month can save over 30 years.

2. Make One Extra Payment Per Year

Rather than monthly extras, some borrowers add one full payment each year. This is an easy method to accelerate payoff without monthly strain. If your lender allows specifying that the extra amount goes to principal, you'll maximize the benefit.

Strategy: Many homeowners time this extra payment with their tax refund or annual bonus. On a $300,000 loan at 6.5%, one extra payment per year can reduce your loan term by approximately 4-5 years and save $40,000+ in interest.

3. Switch to Biweekly Payments

Biweekly payments split the monthly amount in two and result in 26 half-payments per year (13 full payments). That extra payment reduces the principal faster and cuts the loan term. This strategy is particularly effective because it feels less painful than making a full extra payment.

Example: If your monthly payment is $2,000, biweekly payments would be $1,000 every two weeks. Over a year, you'll make 26 payments of $1,000 = $26,000, which is equivalent to 13 monthly payments instead of 12.

Important: Make sure your lender applies biweekly payments correctly. Some lenders charge fees for biweekly programs, so verify the terms before enrolling.

4. Refinance to a Shorter Term

If rates fall significantly and refinancing fees are low, moving from a 30-year to a 15- or 20-year loan can save a substantial sum. Make sure the payment is affordable in your budget.

In 2025, if you originally took a 30-year mortgage at 7% and rates drop to 5.5%, refinancing to a 15-year term could save you over $100,000 in interest while paying off your home 15 years earlier.

Consideration: Shorter terms mean higher monthly payments, so ensure you can comfortably afford the increased payment before refinancing.

5. Use Windfalls for Principal

Apply bonuses, tax refunds, or inheritances to principal. These one-off payments accelerate the payoff timeline and reduce overall interest. Even a $5,000 lump sum payment on a $300,000 mortgage can save thousands in interest and reduce your term by several months.

Best practices: Before applying windfalls to your mortgage, ensure you have an emergency fund of 3-6 months of expenses. Once that's secure, using extra money to pay down your mortgage is an excellent investment.

6. Round Up Your Monthly Payment

A simple strategy: round up your payment to the nearest $50 or $100. If your payment is $1,847, round it to $1,900. This small increase is barely noticeable but can save significant interest over time.

Example: Rounding a $1,847 payment to $1,900 adds $53 extra per month. Over 30 years on a $300,000 loan at 6.5%, this saves approximately $25,000 in interest and reduces the term by 2 years.

7. Make Payments Every Two Weeks Instead of Monthly

Similar to biweekly payments, but you control the timing. By making half your monthly payment every two weeks, you naturally make 13 full payments per year instead of 12.

This strategy works because there are 52 weeks in a year, so 52 ÷ 2 = 26 payments. Since each payment is half your monthly amount, 26 half-payments = 13 full monthly payments.

8. Allocate Raises and Bonuses to Mortgage

When you receive a raise or bonus, instead of increasing your lifestyle spending, allocate a portion (or all) to extra mortgage payments. Since you weren't counting on this money before, you won't miss it.

This "lifestyle inflation prevention" strategy is one of the most powerful ways to build wealth while paying off your mortgage faster.

9. Reduce Other Expenses and Redirect Savings

Review your monthly expenses and identify areas to cut back. Cancel unused subscriptions, reduce dining out, or negotiate lower bills. Redirect these savings directly to your mortgage principal.

Even saving $100-200 per month from cutting expenses can make a significant impact on your mortgage payoff timeline.

10. Consider a Cash-Out Refinance for Investment

If you have significant equity and can get a better rate, a cash-out refinance might make sense. However, this strategy is more complex and should be done carefully with professional advice.

Warning: Only consider this if you're using the cash for investments that will generate returns higher than your mortgage rate, or for essential home improvements that increase property value.

Practical Tips Before Starting

• Confirm no prepayment penalties: Most modern mortgages don't have prepayment penalties, but always verify before making extra payments.
• Direct extras explicitly to principal: Lenders sometimes misapply payments to future installments rather than principal. Always specify "apply to principal" when making extra payments.
• Keep a balanced emergency fund: Before allocating large sums to loans, ensure you have 3-6 months of expenses saved for emergencies.
• Track your progress: Use our mortgage calculator to see how extra payments affect your payoff date and total interest paid.

Real-World Example: The Power of Extra Payments

Let's say you have a $400,000 mortgage at 6.5% for 30 years. Your monthly payment is approximately $2,528.

• Standard payment: Total paid = $910,080 over 30 years ($400,000 principal + $510,080 interest)
• With $200 extra/month: Total paid = $748,000 over 23 years ($400,000 principal + $348,000 interest)
• Savings: $162,080 in interest and 7 years off your mortgage!

Conclusion

Paying off your mortgage faster is achievable with the right strategies. Start with small, consistent extra payments and gradually increase as your financial situation improves. The key is to begin — even $50 extra per month makes a difference.

Use our mortgage calculator to model any of these strategies and see the exact impact on your total interest and payoff date. Experiment with different scenarios to find the approach that works best for your financial situation.