Benefits of Paying off a Mortgage Early

The nonprofit organization hosts workshops to increase financial literacy among the general public and dispenses sound financial advice for achieving common financial goals, such as paying off large debts and mortgages.

Mortgages are often a household’s largest debt and can take decades to pay off. However, if there are no other large outstanding debts, it may be prudent for homeowners to focus on paying off their mortgage early. There are several strategies that homeowners can use to pay off their home more quickly.

Many tactics can be applied without changing the terms of the loan. For example, homeowners can commit to diverting all future income increases and tax refunds to making additional mortgage payments. Mortgage holders can also add a bit extra to their normal monthly payments toward the principal or make payments more frequently.

Homeowners interested in refinancing can convert from a 30-year to a 20 or 15-year loan period, which typically results in higher payments with a lower interest rate. Another strategy is to switch from monthly to bi-monthly payments, which can result in significant interest savings over the life of the loan.