How to Pay a 15 Year Mortgage Off Early

How to Pay a 15 Year Mortgage Off Early
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With proper budgeting and planning, a borrower can reduce the term of a 15 year mortgage and pay off debt early. One extra monthly payment per year on a 15 year mortgage reduces the term by 2 years. Two extra monthly payments per year reduces the term by another full year. Early mortgage payoff can add up to significant interest savings over the life of the mortgage and a quicker route to added home equity.

Set up a bi-weekly payment plan with your mortgage lender. In this plan, the lender charges the borrower half of a full monthly payment every other week. This is a good option for those who are paid every two weeks. This is the equivalent of 26 payments or 13 monthly payments per year. This is an easy way for a borrower to budget in one extra monthly payment per year and pay down a mortgage.

Divide your current monthly payment by 12. Add this amount to your monthly payment each month to equate to a full extra monthly payment per year. To make two extra monthly payments per year multiply that 1/12th payment by 2 and add that amount to your mortgage payment each month. This is a good option for a borrower whose lender will charge extra to accept bi-weekly payments.

Save a small amount from each paycheck in a separate savings account and place any extra cash earned in that account as well. Once a year, apply the entire savings account towards your mortgage payment to reduce the principle balance and reduce the mortgage term.


  • Be sure to mark your payments as principle reduction payments. If pre-payments are treated as a regular payment, which would put part of the payment toward interest, the payoff does not have the same interest savings for the borrower.


  • Remember to keep extra funds on hand for emergencies. If you spend all of your extra money on your mortgage and need funds for unexpected expenses, you cannot easily get cash out of your house without a home equity line of credit.