Pay off your mortgage faster
Most people don’t rush to pay off their mortgage just for the satisfaction of owning their home free and clear. The real satisfaction comes from saving money— potentially a lot of it—in interest. Let’s take a look at the math.
|30-year fixed||15-year fixed|
|Interest rate*||3.750% (3.945 APR)||2.750% (3.090% APR)|
|Monthly mortgage payment||$926||$1,357|
|Total interest paid||$133,443||$44,304|
*The interest rates used in this chart are for comparison purposes only and cannot be relied upon.
So now I want to pay off my mortgage faster. How do I do it?
While you’ll be saving cash in the long run, your monthly mortgage payments are going to increase before they disappear completely. Luckily, you have some options when it comes to how much bigger they get.
Refinancing to a shorter term is the most common and most effective way to pay off your loan quickly. While most people opt for a 30 year mortgage at first, there are also 10-year and 15-year fixed rate mortgages.
Consider a cash-in refinance. In essence, this means making a second down payment. That might not sound so appealing, but keep in mind that the more equity you have, the less you’re going to pay in interest over the life of your loan.
Make extra payments. If you’ve already refinanced, or can’t, this may be your best option. Many people choose to make half mortgage payments bi-weekly (rather than a full one monthly). This equals out to one extra full payment a year. Following this schedule you’d pay off a 30-year fixed-rate mortgage in about 23 years. If that’s still too slow, try full payments bi-weekly, or on a schedule that better suits you.
Why choose Total Mortgage?
We have almost 20 years of experience getting our customers the best mortgage possible.
- We have some of the lowest interest rates in the country, and we may be able to save you money on your home payments.
- No pre-payment penalties—go on, pay your mortgage off as fast as you can. We won’t get cranky about it.
- Our mortgage experts educate you as you move through our process, so you’re not left with questions.