How To Pay Off a Mortgage in 10 Years or Less

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Paying off a mortgage on a home in 10 years or less is not going to be feasible for all individuals or families. However, if you are looking to decrease the amount you pay to your bank in interest over the life of your mortgage, the quickest way to do so is by rapidly overpaying your monthly mortgage payment. Deciding how much to overpay will require some calculation.

First, to pay off a mortgage in 10 years or less, you are going to need to ignore conventional mortgage wisdom when it comes to shopping for a home. The normal rule of thumb in determining how much house you can afford is that your total monthly mortgage payment should not exceed a third of your total monthly gross income. If you desire to payoff a home in ten years or less, you will need to change that to 15 percent of your monthly gross income, not 33 percent. This strategy is only effective if you have a stable, reliable income stream.

As an example, if your current, reliable gross income is $100,000 per year, then you are receiving $8,333 per month in gross income. If we take our $8,333 and multiply by 0.15, then we know our monthly mortgage payment on a 30 year, fixed rate loan should be no more than $1,250. At this point, it is worth saying, that you will be paying much more than $1,250 per month. This step is to help you determine affordability.

Now, use the mortgage calculator in the references section to help you determine how much house you can buy if you desire to pay off a mortgage in 10 years or less. As an example, if you can get a 5.5 percent rate right now, we know that our payment on a 30-year mortgage will be near $1,250 if the mortgage on your home is $220,000. Notice that this is roughly double your income.

To pay off a mortage in 10 years or less, we have now established our own rule of thumb -- do not spend more than double your gross annual income on the purchase price of a home.

Now it is time to structure your payments. This is extremely easy to understand -- you are going to pay two times your required monthly mortgage. In the example, we will send the bank or have them automatically withdrawal $2,500 per month. Your extra payment will all go to reduce the principal amount owed on your home. As the principal decreases, the amount of interest you pay the bank each month will also decrease. This will greatly accelerate your mortgage payoff time. With our example, you can use the same calculator to see that by paying $2,500 per month, we will payoff the 5.5 percent, 30 year mortgage, with no down payment in 9 years and 4 months.

It is preferable for you to use a 30-year loan to pay off a mortgage in 10 years or less. The reason for this is because if something tragic were to happen to your income stream, you may still be able to afford the standard monthly payment on the 30-year loan, rather than a 15-year loan. Also, with how quickly you were paying down principal, you may be able to refinance to save your home. Again, since your income is extremely reliable, this should not be a problem.


  • When using the calculator, remember that a down payment of at least 10 percent will likely be required. Therefore, know that you must have that amount of cash available and that you should reduce the purchase price by that amount when determining the affordable monthly mortgage payment.


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