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Ways to Pay Off Your House Early

Ways to Pay Off Your House Early | House money

If buying a home is the dream, one of the most popular ways to do it is through a 30-year fixed-rate mortgage. While a mortgage can be as short as 10 years with New American Funding, a 30-year fixed-rate mortgage is one of the most common options because the monthly payments can be lower than mortgages with shorter terms.  

However, that doesn’t mean you need to take all 30 years to pay for it. Paying off your mortgage early can have many benefits in the right circumstances. It may be able to give you more financial flexibility and freedom in the future. It can also be an effective way to pay less interest overall, instead of letting that accumulate over three decades in the form of monthly payments.  

If paying off your home loan early is a financial goal for you, there are a variety of options that may help you do so.  

Options on How to Pay Off a 30-year Mortgage in 15 Years 

Make Extra Mortgage Payments 

What happens if you make one extra mortgage payment a year? The answer to this simple question can be difficult, as it depends largely on your unique financial situation. If you have the extra funds to do so, making an extra payment on your mortgage per year can have multiple benefits.? 

The total interest you pay on your mortgage will be reduced. When you make an additional payment, you must inform your mortgage servicer that the extra payment is to be applied to the principal balance. These extra principal payments will pay off the outstanding principal faster, which results in less total interest payments required. For example, a 30-year mortgage could be paid off in 29 years to save you one whole year of interest payments.    

Making an extra mortgage payment may enable you to pay off your mortgage early, allowing you to potentially start saving money faster for other expenses or goals you may have.? 

Bi-weekly payments 

If permitted by your mortgage servicer, setting up a bi-weekly payment schedule for your mortgage payments can take years off your total payments. Essentially, you pay every two weeks instead of once a month. By making payments of half your monthly payment every two weeks instead of one full payment per month, your payments end up equaling 13 months’ worth of payments per year instead of 12 months of payments. 

This extra payment each year can help reduce the total number of payments due on your mortgage.   


Choosing to refinance a mortgage can be a good idea and comes with some benefits that may make this option an even more appealing way to eliminate your mortgage in a shorter amount of time. By shortening your mortgage term from a 30-year fixed-rate mortgage into a 15-year mortgage, you can cut the time it takes to pay off your home in half. However, the increased cost of the monthly payment should be considered before deciding to go through with refinancing into a shorter term.? 


Some mortgage servicers offer a loan recast option for specific loan programs. Recasting your 30-year fixed-rate mortgage involves making a lump-sum payment directed at the principal amount, after which the lender will recalculate your monthly payment to reflect the change. This can be a practical choice to pay off your mortgage quicker if you recently acquired a significant amount of money, such as an inheritance or, if you are very lucky, won the lottery. These aren’t requirements for recasting, however. Some mortgage servicers will require the lump sum put toward the principal loan amount to be around $5,000, but this can vary. Keep in mind, though, that there is most often a fee when choosing to recast your mortgage. 

Is Paying Off a 30-year Mortgage in 15 Years the Same as a 15-Year Mortgage? 

The short answer? Yes…but also no. It all depends on the interest rate associated with your 30-year mortgage. If the interest rate is high, then you may want to pay off your loan sooner rather than later.  

However, if your interest rate is low, then the amount of money you’d spend over the three-decade-long time period will more or less equal the amount you’d pay if you had a 15-year mortgage instead. Additionally, if the interest rate on your mortgage is low, you could instead put your extra money toward paying off other bills or contributing to other investments, such as a 401(k) plan.  

The benefits associated with fully paying off your 30-year fixed-rate mortgage can help you focus on other outstanding debts you may have, things you’d like to experience, or a savings account you’re working on adding funds to. If you’re interested in paying off your mortgage early and want to know if it could be the right decision for your needs, contact New American Funding. Our loan officers will be happy to answer any questions you might have.  

Give us a call at 888-978-7747 to discuss your options today! 

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