How to Pay Off Your Mortgage Early: Tips and Strategies

May 9, 2023

If you have a mortgage, then you’re probably eager to pay it off as soon as you can. Once you’ve paid off your entire mortgage, you won’t have that monthly payment, and you can use your money for other necessities.

Paying off a mortgage early is a lot like what you would do to calculate loan payoff options. You’ll look at your various revenue streams and think about how to divert them so you can get clear of a longstanding financial obligation sooner.

Figuring out how to pay off your mortgage early may not be as challenging as you think. Check out our list of tips and strategies that should get you moving in the right direction.

1. Use Your Income Tax Refund

If you’re expecting to get an income tax refund in any given year, that might turn out to be a pretty nice windfall. You may get back several thousand dollars in some instances.

You can certainly use that money for something frivolous, like a vacation or some luxury item you’ve been wanting. However, it might be more practical to put that cash toward paying off your mortgage.

If you want to pay off your mortgage earlier than you’d anticipated, having that goal should always be foremost in your mind. If you put your income tax refund toward that goal every year, it can make a real difference.

2. Put Other Windfalls Toward Your Mortgage As Well

You might also get unexpected windfalls from time to time. For instance, maybe a relative dies and leaves you an inheritance. Perhaps you get some birthday money from a relative. You might get some cash from the settlement of a class action lawsuit.

Any time you get that kind of windfall, you can use it for something less-than-crucial, or you can put it toward your mortgage. It will likely take some discipline not to use that money for a new video game system or something similar that you want, but if you have that goal of paying off your mortgage in mind, you can keep striving to get there.

3. Put Work Bonuses Toward Your Mortgage

You might get a bonus at work sometimes. For instance, maybe you’ll get a bonus around the holidays.

You can use that money for holiday merriment, or you might put that toward your mortgage as well. It’s just one more yearly payment that you can use to chip away at that mortgage, bit by bit.

You Can Pay Off a Mortgage Early With Dedication

If you remain dedicated and keep your goal of paying off your mortgage early in mind, you can often do it. It’s sometimes tough when you’re working on a multiple-year project like this because you’ll get no instant gratification. Instead, you must exercise patience and imagine this project as a marathon and not a sprint.

You can put any work bonuses you get around the holidays or for other reasons toward paying off your mortgage. You might also put any other windfalls that you get toward it. Those might include lottery winnings, money you get as an inheritance, birthday money from relatives, or any other unexpected funds that find their way to you.

You can put any income tax refund that you receive toward your mortgage as well. That’s a windfall you can expect every year unless you owe the IRS money for some reason.

Paying off a mortgage early might seem like an impossible dream when you start the project, but the number you must reach will keep getting smaller as the months and years roll by. If you’re tenacious, you can achieve your goal. You can imagine how gratifying it will feel when you make that final payment and own your property free and clear.

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