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  • Writer's pictureJennifer Lampe

Should You Pay Off Your Mortgage Early?

Is it worth paying off your mortgage early? Yes, indeed! Paying off early frees up that future money for other uses. But paying off your mortgage early is only best for candidates who already have enough money to cover an emergency. You’ll want at least 3 – 6 months’ worth of household expenses in liquid cash before you focus on paying off your mortgage. The truth is, it’s more difficult to take money out of your home than it is to withdraw money from a savings account.

So, should you pay off your mortgage as early as possible? If you have some extra cash at the end of the month, should you put it all towards your mortgage loan? Honestly, there’s no simple “yes” or “no” answer for that. There are both risks and benefits to paying off your loan early. But with a trusted partner/mortgage advisor, it will be easier to understand the aspects of a mortgage and how it really works.


It wouldn’t be a great idea to pay off your mortgage loan early if you still have existing debts. The best thing to do is account for all your debts, and find out which ones accrue the most interest in the least amount of time. Whichever debt has the highest interest rate, focus on paying that down first.

Avoid prepayment penalties- this is the fee your lender charges if you pay off your debt prematurely to provide you with a disincentive for paying off your loan ahead of time. Most lenders allow you to pay off up to 20% of the loan balance each year. Let’s be honest, there’s no point in paying off your mortgage earlier if it means going back to the debt in the future.


Who wouldn’t want to have a peace of mind after paying off your debt as early as possible, right? By paying off ahead of time, you can enjoy the peace of mind of no pending expenses hanging over your head. Paying off your mortgage early can save you money, since you will no longer be paying accrued interest. This can free up funds to focus on other areas of your life, like investments, retirement, college fund, or travel. Not to mention, you don’t ever have to worry about foreclosure.

How to Pay Off Your Mortgage Early:

If you are leaning more on the PRO side, you may take this advice and free yourself from debt.

  1. Make extra payments - there are two ways of making extra payments:

>Biweekly mortgage payment - this is by splitting your monthly mortgage in half. By doing this, you’ll end up making the equivalent of 13 months of mortgage payments in one year, instead of 12, and saving a bundle in interest. This tactic might be easy for some homeowners because it’s barely noticeable in the monthly budget.

>Extra monthly payment- in this case you pay extra against the principal each month, or make an extra principal-only payment annually. It can also save you tens of thousands of dollars in interest over the life of the loan.

  1. Recast your mortgage - Here, you keep your existing loan, pay a lump sum toward the principal and your lender then adjusts your amortization schedule to reflect the new balance.

  1. Get a loan modification - The first thing to do here is find out if your loan has a prepayment penalty through reaching out to your loan servicer. Next, make sure there are no restrictions on how and when you can make additional payments, because not all lenders approve or allow that.

Are you thinking of paying off your mortgage or buying a new home? Visit our website today and discover your options!



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