6 Helpful Tips for Paying Off Your House


Just because you take out a 30-year mortgage on a house, doesn’t mean you have to wait three decades to own your house free and clear. There are plenty of ways to pay down your mortgage balance at an accelerated rate and build equity faster. Let’s take a look at a few of the top tactics:

  1. Make a Larger Down Payment

The first and most obvious step is to make a larger down payment on the front end. If this is an option for you, it’s something to carefully consider. 

“When it comes to buying a house, the larger your initial down payment, the more equity you instantly gain,” Green Residential points out. “If you put down $50,000, you have $50,000 in immediate equity. If you only put down $25,000, then your equity is cut in half.”

This sounds pretty obvious, but you’d be surprised by how many people refuse to make significant down payments. In doing so, they unintentionally increase their costs and may even be required to pay private mortgage insurance (PMI) until enough equity is built up to lower the lender’s risk to a nominal level.

  1. Take Out a 15-Year Loan

Financial guru and radio personality Dave Ramsey is a firm believer in taking out a 15-year fixed-rate mortgage with a payment that’s no more than 25 percent of your take-home pay. In other words, if you bring home $6,000 per month after taxes, he believes your payment should be no more than $1,500 on a 15-year loan.

While this is definitely a conservative approach, it’s one way to pay off your house quicker. (The 15-year loan means more of your monthly payment is going towards principal.) If you already have a 30-year loan and don’t want to refinance, try paying it down like a 15-year. 

  1. Downsize Your House

It’s possible that you’re in a house that’s unaffordable to begin with. And if you can’t increase your income, you’ll need to downsize your house. The key is to avoid touching any of the equity you have in your current home when it comes time to buy the next house. Every last penny needs to be infused into the downpayment on your next property. This ensures you’ll pay off your house quicker and more cost-effectively. 

  1. Make an Extra Payment Each Year

By paying one extra mortgage payment per year, you can knock as much as eight years off of a 30-year mortgage and save thousands of dollars in the process.

The easiest way to make an extra payment each year is to take your total payment and tack on 1/12 of the amount in extra premium each month. So if your mortgage payment is $1,200, you would pay an extra $100 each month. This would essentially make your mortgage $1,300. 

  1. Throw Bonus Money at the House

One of the easiest ways to pay down your mortgage faster without making any significant sacrifices is to throw all bonus money at your loan. Bonus money includes things like birthday money, tax refunds, work bonuses, lottery winnings, etc. (You’d be surprised how much of this bonus money comes in over a period of a few years.) 

  1. Live Off One Salary

If you and your spouse both work, you should try to live off one salary for a couple of years. It’ll definitely stretch you, but it’s almost always possible. In some cases, this could allow you to pay off your mortgage in just three to five years. (Especially if you both make decent salaries and you’re living in a modest home.)

Become Debt Free 

What would you do if you were debt-free? Without owing any payments to anyone, would you be able to travel more, spoil your kids or grandchildren, invest, or give to your favorite charities? The possibilities are endless. But in order to get there, you have to pay off your house.

Using the tactics discussed in this article, sit down and develop a game plan. Discipline and consistency are the keys. Once your plan is in place, pursue it with vigor and intentionality. It won’t happen overnight, but you’ll look up in five, 10, or 15 years and that balance will be hovering near zero.