Mortgage Strategy

How to Save Thousands in Interest & Pay Your Mortgage Off Faster

A few simple strategies can make an enormous difference over the life of your mortgage. Here's how to put thousands back in your pocket.

Jason Byun

Broker

There are a few easy ways to make extra principal payments that can save you a significant amount in interest and get you mortgage-free sooner than you thought possible.

Round Your Monthly Payment Up

The results of this simple strategy can save you a fortune and drastically reduce the length of your mortgage. For example, if your monthly payment was $734, rounding it up to $800 per month could save you more than $48,000 in interest and cut 7.5 years off your mortgage.

Save $48,000+ · Shorten by 7.5 years

Make One-Time Pre-Payments Using Tax Refunds

Apply your annual income tax refund directly to your mortgage principal. On a $100,000 mortgage, a single $1,000 refund applied this way could save you over $8,600 in interest and shave more than a year off your mortgage.

Save $8,600+ · 1+ year shorter

Choose a 15-Year Mortgage

If you can afford it, a 15-year mortgage is far better than a 30-year. Monthly payments are only slightly higher, but the interest savings are incredible. On a $100,000 mortgage at 8%, you'd save $92,083 in interest over the life of the loan.

Save $92,083 in interest

Using these strategies is the easiest way to reduce your interest expenses and shorten your mortgage period. Even one applied consistently can have a dramatic impact.