Five ways to pay off your mortgage quicker

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Buying a home is most likely the single largest purchase you will ever make in your life. And unless you’re independently wealthy, a mortgage is likely how that purchase is going to be possible. And while it can seem hard to comprehend paying off something so expensive, for so long (we’re talking decades here!), there are a few ways that you can make paying off your mortgage seem like less of a life sentence and more of a life goal.

1. Pay more up front

The more you can put toward your down payment, the smaller the balance owing on your mortgage will be. Starting out with a smaller mortgage will make your payments over a standard 25-year mortgage smaller and it might even give you some breathing room in your budget to opt for larger payments over a shorter amortization period. This means you could pay off your mortgage quicker and pay less interest.

2. Make bigger payments

If possible, talk to your financial institution to see if you’re able to increase your mortgage payments beyond the minimum. You may have to make some financial decisions—like no vacations for a few years or opting for a used car instead of the latest model—but your future mortgage-free self will thank you! You’ll also pay less interest because those extra dollars will go toward the paying principal amount quicker.

3. Pay more often

If you’re able to make accelerated payments, you can shave years off the life of your mortgage and save on interest too. With a bi-weekly accelerated payment, your mortgage payment is divided into two and that amount is withdrawn every two weeks. You’ll still make 26 payments per year, but it works out to be a little more each payment than with a standard bi-weekly payment. Same thing if you wanted to do weekly accelerated payments—your monthly payment is divided by four and you’ll still make 52 payments, it’ll just be for a little extra.

4. Top it off

Most mortgages allow you to make lump sum payments up to a certain amount without penalty. An unexpected tax return, office holiday bonus, or other financial windfall could be put toward paying off your mortgage. Make sure you talk to your financial expert to understand what lump sum payment options your mortgage allows.

5. Plan ahead

When shopping for mortgages, consider if you can afford making larger payments over a shorter amortization period—that’s the total length of time it takes to pay off your mortgage. The longer the amortization period, the more interest you’ll owe on your mortgage. You could save thousands in interest by choosing a shorter amortization period.

While it can be tempting to put everything you have toward paying off your mortgage quicker, don’t forget about things like retirement savings and emergency funds. Ultimately, it’s all about balance—your mortgage is just one piece of your financial life.

It’s also important to avoid being house poor by having an honest look at your lifestyle and how you can maintain a social life and savings account along with a mortgage. Maybe that means buying a smaller starter home or renting out an extra bedroom to help you make your payments. If you’re not sure how much of a payment you could afford, our mortgage payment calculator can help.

There’s no question buying a home is a big step—and if it’s your first time, our Guide to Homebuying can help answer some of your questions. Otherwise, the friendly folks at your local credit union are always there to help.