With enough searching online, you’ll find TONS of stories from folks who’ve paid off their mortgages in record time and the strategies they used to get there.
If you want to crush your mortgage, you can. I believe you can. You have to want it because it can be a difficult journey. Maintaining focus on such a lofty goal was a struggle for us at times, but after this month, we’ll be mortgage free. And it was WORTH IT, though we had our challenges along the way.
When we were feeling lazy and thought about going out for dinner, we’d take a look at the balance of our mortgage instead. (We had our mortgage statements on the side of our fridge.)
When we thought about spending $500 on a case of our favorite chardonnay, we considered what it would feel like to delay paying off our mortgage. And then the tasting notes. I’m not going to lie. I def looked at the tasting notes for the vintage. Thankfully, we returned to our senses and decided it wasn’t worth delaying the payoff. And it would have been an embarrassing blog post to write.
But check with your bank to ensure you have no prepayment penalty. (This was noted in our small house mortgage, so I imagine that there might be someone out there who might be affected.)
And check with the financial planner you trust for advice. These are strategies that others leverage to their benefit, but they may not be right for everyone. We’re not financial experts, so we can’t tell you what works best for you. But we can tell you that if crushing your mortgage is a priority for you, we’re here to cheer you on!
Strategy #1: Sell your house.
For us, this was a no-brainer. We lived in a big house, so we had a big mortgage. Selling our house led to eliminating our mortgage in a day, which was an AMAZING feeling!
Technically, this is not a strategy to pay off your mortgage, but it could be a way to get to a smaller mortgage you can pay off faster should you elect to downsize to a smaller house, a tiny house, or an Airstream.
Strategy #2: Switch to bi-weekly payments.
According to this post from Andrew Daniels, switching to bi-weekly mortgage payments tacks on a couple of extra mortgage payments each year. Use this mortgage calculator to see what impact a couple of extra payments will have; it’s awesome how much interest you can save!
Strategy #3: Refinance for a shorter term.
Have a 30-year mortgage? Perhaps you have the ability to refinance to a shorter term with a lower interest rate. This could result in larger payments, depending on the term you select.
We chose the shortest term we could for the small house, so our payments were easily 50% higher. However, our mortgage payment for the small house was still hundreds of dollars less than the mortgage payment for the big house, so we knew our budget could accommodate it.
Strategy #4: Pay extra.
Our small house mortgage company made this strategy SUPER easy and without any penalty or fees.
Though we had our small house mortgage payment automatically debited from our checking account, we continued to receive mortgage statements in the mail. On the stub, it noted we pay automatically, but there was a line designated for extra PRINCIPAL payments. Every month, I sent this stub in with some extra amount filled in on the principal line (and our personal check, of course!). Additionally, I sent a nice note to the bank asking them to apply the money to the principal, just to be sure they applied this money properly.
Paying the principal down each month helped us save a significant amount of interest.
Strategy #5: Put your house to work.
Do you have an extra room or two to rent, even for a couple of months a year? or could you rent your house for a weekend each month through Airbnb?
Do you have room in your driveway to rent to someone who lacks such an amenity?
Do you live in a rural or scenic locale? Could you rent your backyard for wedding ceremonies?
Anything your house can do to offset your expenses results in extra cash you could use to crush your mortgage!
Strategy #6: Start a side hustle.
I’m forever a proponent of increasing one’s income for a LOT of reasons. Jason Butler wrote about the importance of having a side hustle over on our other blog.
Side hustling is one of the reasons why we crushed debt so quickly. Last year, we used side hustling to pay off our credit card debt. And then we used our side hustle cash, coupled with bonuses from work, to make extra principal payments. Making a conscious decision to use all of our side hustle income for a specific purpose kept it out of our budget so that we didn’t spend it. Side hustling was extra money for us, money we didn’t need, so we made sure to apply it to debt rather than spend it frivolously.
If you have a side hustle or want to start a side hustle, ensure it’s worth your time. I’ve read a lot of blog posts about side hustles and I’ve also tried lots of side hustles over the years. Many side hustles pay too little and require too much time. If you want to crush your mortgage, time is your enemy; the more time that passes, the more interest you pay, so choose a side hustle that’s worth the time.
I have more tips for side hustlers here.