Pay Off Your Mortgage Early: 12 Easy Steps

Pennies stacked in columns

Taking all 30 years to pay off your mortgage will end up costing you thousands more than paying it off early. Thanks to interest rates steadily climbing toward a jaw-dropping 5%, finding a way to subsidize your mortgage is more important than ever.

As you search your no-wiggle-room budget for any spare change, you might be wondering how you could ever make more than the bare minimum monthly payment. If you’re like most people, you have approximately no extra money to dedicate to your mortgage. Even without that extra cash, a mortgage-free life might not be as far away as you think. Check out these genius ways to pay off your mortgage early.

12 Ways to Pay Off Your Mortgage Early

Ways to Pay Off Your Mortgage Early - Neighbor Blog

#1 Refinance Your Loan

Fun fact! The amount of interest several people pay on their 30-year mortgage is more than the value of the actual home. That means if you financed $200,000 when you bought your home, you could be paying $200,000+ in interest. Yikes.

A simple way to avoid paying all that extra interest is to refinance from a 30-year mortgage to a 15-year mortgage. Your payments will still be manageable, and you’ll be able to pay your home off in half the time. Putting in a little money now will save you big time down the road.

#2 Start a Side Hustle

If you don’t have extra money, go out and make some! There’s no better way to pay off your mortgage than with a side hustle.

The best part of starting a side hustle is anyone can do it. All you have to do is identify a unique skill or asset that you have and could use to make money. You might enjoy photography or painting. Maybe you love extreme hiking and want to guide other people through your favorite trails. No matter what your interests are, you can start a successful side hustle.

Once your side hustle gets into full swing, you could be looking at putting hundreds of extra dollars toward your mortgage every month. Depending on your loan terms, you might end up paying off your mortgage 5-7 years earlier.

#3 Make Your Space Pay for Itself

Another option is to make your extra space start pulling its own weight with Neighbor. Did you know the average host on Neighbor makes between $50-$100 a month? Putting that kind of money toward your mortgage means you are looking at paying it off 5 to 10 years earlier!

Hosting with Neighbor has 3 simple steps:

  1. Identify space you aren’t using such as an unfinished basement, garage, closet or RV pad.
  2. Sign up for FREE as a host with Neighbor, take pictures and list your space.
  3. Watch money flow into your checking account every month once you find the perfect renter.

This is probably the easiest and most logical way to pay your mortgage off. Why not make your house pay its own mortgage? Try hosting with Neighbor today!

Neighbor Garage Storage

#4 Pack a Lunch

Let’s do some simple math. If you buy lunch every day, you’re spending $6 a day on average eating out. Over the course of one year (not counting weekends and holidays), you’ve spent about $1,500.

If you pack a lunch instead, averaging $2 or less a day, you’ll save at least $1,000 every year. Putting that toward your mortgage will help you pay it off two to four years earlier! Now, imagine making everyone in your house pack a lunch. Hello, mortgage-free you. Goodbye, overpriced burritos.

Here are more than 50 lunch ideas to help you get started.

Couple watching TV

#5 Turn Off the TV

More than one third of Americans pay over $100 a month for television. Paying for those expensive satellite and cable packages really adds up over time. In fact, by the time you’re 30-year mortgage is paid off, you’ve spent $36,000 just on TV.

Try switching to your favorite streaming service instead and putting the extra toward your mortgage. That $36,000 can help you out rather than going into the pockets of big cable companies. Save even more by cutting the cord completely.

#6 Downsize

Huge houses are the trend, and they’re only getting trendier. While everyone else is spending half their salary on a way-bigger-than-it-needs-to-be home, you can avoid the massive debt. Now is the time to find good deals on smaller homes, and even tiny homes, as other homeowners look for bigger space.

Cutting your space in half could mean cutting your next mortgage in half, which means you could pay it off twice as fast.

#7 Make One Extra Payment a Year

One measly payment every year might not seem like it will help you out much in the long run. Turns out, that extra payment can save you tens of thousands.

For example, let’s say you financed a $200,000 mortgage at a set 5%. You’d end up paying more than $180,000 in interest when all is said and done. If you make one extra payment every year, however, you will save more than $35,000 in interest. Plus, you’ll be looking at paying off your mortgage three to five years early. Breaking that payment into a monthly chunk will probably cost less than your monthly satellite TV package.

#8 Take Advantage of the Sharing Economy

Everyone is talking about the sharing economy. It’s bringing communities together, making more side hustle opportunities and giving you a ton of ways to save money. If you haven’t taken advantage of “sharing” yet, try it out! There are unlimited ways to make money with anything from renting out your parking space to dog sitting.

Along with the money you can earn from the sharing economy, let’s talk about the money you can save. Opting to “share” can save you up to 50% on some services. That means your monthly bill for transportation, storage space and more just got cut in half. All that extra money is guaranteed to help you pay off your mortgage faster.

Sharing Economy Pioneers

#9 Declutter and Sell Your Old Stuff

If you’re like most Americans and spend way too much money on things you don’t ever end up using, you should think about selling it. Those antique lamps and fine china dishes aren’t doing you any favors by collecting dust in your attic anyway.

There are several websites and apps built for the sole purpose of selling old junk, so why not give it a go? As an added bonus, decluttering your space will help you spend less money in the future. This means you’ll have plenty of extra dough to put toward your mortgage. If you manage to make/save the equivalent of $100 a month, you can save over $30,000 in the long run.

#10 Utilize Your Tax Return

Several people receive a tax return every year. If you’re one of these, there’s no better home for that money than your home loan. Even if you don’t receive a tax return, you can still put “found money” toward your mortgage. This includes money from bonuses at work, raises, financial gifts and more. Putting all your bonus cash toward your mortgage throughout the year could help you pay it off five years early.

#11 Skip the Pricey Entertainment

The average American spends close to $3,000 every year on entertainment. Thanks to the cost of movie theater tickets and expensive family fun centers, a family night out can get pricey. You can keep some of that $3,000 for your mortgage by finding ways to save on entertainment.

For example, renting a Redbox instead of taking your family of four out to the movies will save you $30+ dollars. Playing at the local playground or going to a free museum instead of the family fun center will save you even more. You can pay off your mortgage five to seven years early just by putting the money you save on entertainment toward your payment.

Vacation planning

#12 Save on Your Vacation

Making a few smart choices while booking your summer vacation can save you hundreds of dollars. Clearing your browser cookies and timing your trip strategically are great ways to find the best deals. Finding more ways to save can help you cut vacation expenses down and put more money toward your mortgage. Cutting a few hundred off your vacation can help you pay your mortgage off a couple years early.

How Much Can You Save by Making One Extra Payment a Month?

Making an extra payment every year will help you pay off your home loan nearly five years early, but what about an extra payment every month? With regular double payments, you are looking at paying off your mortgage in at least 10 years. That means you will save tens to hundreds of thousands of dollars in interest. Here are a few ways you can subsidize your mortgage and come up with those extra payments:

  • Home sharing. Use Neighbor and Airbnb to get the most out of your home. By renting out a few spaces you aren’t using, you’ll rack up extra money in no time. Once you pay off your home loan, you can just pocket all the extra income.
  • Becoming a minimalist. Cutting back on the amount of things you spend money on really adds up. By purchasing only things you need, you’ll save enough money to make double payments.
  • Hiring yourself out. You can make money outside of your regular job by completing odd jobs for people in your neighborhood. Using TaskRabbit, you can sign up and let customers come to you.


Rent out your RV pad


Do Extra Mortgage Payments Go Toward the Principal?

Making extra mortgage payments can turn into a sticky situation depending on your loan terms. Some banks allow you to pay on principal only with a separate payment, while others require you to put the extra on your regular payment. Some banks even charge a fee for extra payments or principal-only payments, so it’s best to take a look at your loan terms before you make any extra payments.

If your bank offers little wiggle room for paying your mortgage off early, you can always refinance to a 10 or 15-year loan and save yourself the hassle.


The housing industry is by far the leader in holding the most debt. Being free from your mortgage payment might seem like a distant dream, but it doesn’t have to. By purposefully finding extra money to dedicate to your home loan, you’re guaranteed to see your final payment notice a few years early. To pay off your mortgage even faster, take full advantage of the sharing economy and make your space work for you.


What’s the best way you’ve found to make extra payments on your mortgage? Let us know below!

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