(760) 822-7062 Rick@RickYells.com
The 30-year fixed rate mortgage is the most popular mortgage in the US, but with 15-year mortgage rates still near historic lows, does it still make sense?  As the average age of home buyers increases past 30 years old, the reality is that you could still be making mortgage payments well into your retirement.  It can be difficult to make your mortgage payment, once you are past your prime income-earning years. So, set a smart financial goal for yourself to pay off your house before you retire and before your income declines.

To help you become mortgage free faster, here are some simple ways that you can pay off your mortgage faster, and save a lot of money over the course of your loan.


  1. Make bi-weekly payments
    Instead of making 12 monthly mortgage payments, pay half your normal mortgage payment every two weeks. You’ll make 26 total payments per year, equivalent to 13 monthly mortgage payments.  For example, if you have a $200,000 loan at 5% interest, making a bi-weekly payment will pay off your 30-year loan in 25 years and 3 months. Your total interest drops by more than $34,000.

    Not every lender will take bi-weekly payments and some lenders charge a fee to accept them, so check with your lender before adjusting your payment plan.

  2. Make monthly prepayments to principal 
    Making prepayments is one of the most effective way to pay off your mortgage faster. An easy trick is to round your regular payment up to the nearest $100. Be sure that your extra payments are marked to go directly to your principal balance. By directly reducing your principal each month, you pay less interest each month and more towards your loan balance.  Check with your lender to make sure the payments are properly applied and if the lender charges any prepayment fees.
  3. Make an extra payment at the same time each year
    If you cannot commit to a fixed prepayment each month, consider using your holiday bonus or your tax refund and apply it to your principal. It’s another great way to save money and accelerate the time it takes to pay off your loan.
  4. Refinance to a lower interest rate
    With rates still near historic lows, reducing your interest rate will can save you money over the life or your loan and also save you money, each month, because you will have a smaller monthly payment. Refinancing rates and fees vary from lender to lender, so shop around to find the best loan available.
  5. Refinance to a shorter term (Recommended)
    Refinancing to a shorter term loan offers the best way to pay off your mortgage faster while saving you thousands in interest.  15-year ratesstill remain near historic lows, with rates significantly lower than for 30-year loans, making it more affordable than ever.  Low rates may not last much longer and many savvy homeowners have taken advantage of the low 15-year rate to reduce their mortgage costs.   If you can afford the 15-year mortgage payments, you could save hundreds of thousands in interest and be mortgage free in half the time.