4 Smart Ways to Pay Off Your Mortgage Faster

Tired of watching so much of your hard-earned money go toward interest instead of your home? Each month, a big part of your mortgage payment goes straight to interest, making it feel like you’re not getting ahead.

I talk with people daily about real estate, and one of the most common goals I hear is paying off a mortgage sooner. But as my friends at Envoy Mortgage remind me, this only works when you have a smart strategy.

Over the years, I’ve shared methods with clients that can truly shave years off their mortgage. Here’s how I guide them.

1. Make one extra payment per year. One of the simplest ways to shorten your mortgage term is to make one extra payment per year. You can use your annual bonus, tax return, or even holiday gift money for this. When done consistently, this can shorten a 30-year mortgage by four to five years. It’s a simple step, but it makes a real difference over time.

2. Switch to biweekly payments. Another effective method is biweekly payments. Instead of paying once a month, you pay every other week. That adds up to 26 smaller payments per year, which equals 13 months of payments instead of 12. This works much like making an extra annual payment and helps shorten your mortgage term without significantly increasing your monthly budget.

3. Apply windfalls strategically. If you receive a large sum of money, like from selling an asset or an unexpected bonus, it can help pay down your mortgage faster. But there’s a common mistake: Sending it in as a regular payment often means the lender applies it toward future payments, not principal. That doesn’t speed up your payoff.

The key is to instruct your lender to apply the money directly to the principal while continuing your regular monthly payments. That’s what actually reduces your loan term.

4. Refinance to a shorter term (only if it makes sense). Refinancing to a shorter-term loan can cut years off your mortgage, but it’s not always the best choice. For example, if you have a 2.75% mortgage from the COVID era, moving to a 15-year loan at around 5% might not save you money.

In that case, it can be better to keep your current low rate and accelerate your payments to match what a 15-year mortgage would require. The key is having a plan that makes sense for your rate and financial situation.

Tap into home equity without losing your low rate. I often hear from homeowners who love their current mortgage rate but want to make improvements. Envoy Mortgage offers a loan that appraises your home based on the improvements you plan, not its current value.

This allows you to access the equity you’ll create or reorganize your finances, all while keeping your existing low rate. It’s a rare option, but it can be helpful for the right situation.

All of these strategies can help you pay off your mortgage faster, but the real benefit comes from using them strategically. A clear plan can reduce your loan term, increase financial flexibility, and give you a smarter path to homeownership.

If you’d like guidance on these options, you can reach out to me at (515) 346-6204 or email Misty@MistySOLD.com. I’m also happy to connect you with Envoy Mortgage professionals, Bryan Zeutenhorst and Eric Bokker, who can assist you in exploring your best path forward.