Buying a home is one of the biggest financial milestones, and for many people, the monthly mortgage payment quickly becomes just another line in the budget. If you’ve ever wondered whether paying off your mortgage early is possible, the answer is yes, and it can be a smart way to save on interest and gain peace of mind.
In this Redfin article, we’ll break down what early mortgage payoff really means, when it makes the most sense, and strategies you can use, like making extra payments, to pay down your loan faster. Whether you’re building a life in a house in Los Angeles, CA or settling into a home in Dallas, TX, understanding your options can help you make the best financial decision for your future.
Can you pay off your mortgage early?
Yes, most lenders allow you to pay off your mortgage ahead of schedule by making extra payments, increasing your monthly payment, or paying the loan in full. In the U.S., most mortgages don’t have prepayment penalties, but some do – so confirm with your lender before moving forward.
How to pay off your mortgage early
If you’ve decided early repayment is right for you, here are some practical ways to do it:
- Make extra principal payments: Add a little extra toward the principal each month or make an additional payment once or twice a year.
- Round up your payments: Instead of paying $1,250, round it up to $1,300. Those small amounts add up over time.
- Switch to biweekly payments: Paying every two weeks instead of monthly results in 26 half-payments, which equals 13 full payments each year instead of 12. This works out to roughly one extra monthly payment each year.
- Apply windfalls: Use tax refunds, bonuses, or side hustle income to pay down your mortgage balance.
- Refinance to a shorter term: A 15-year mortgage has higher monthly payments but significantly less interest over the life of the loan.
>>Also read: How to Lower Your Mortgage Payment
Example: How much you could save with extra payments
Let’s…