Courtesy of Douglas Elliman Real Estate Company, agents for NYC Apartments.

Paying off your mortgage early can definitely produce numerous advantages. Not only are you able to benefit from the ability to shave a few years off the total terms of your mortgage, which can amount to thousands of dollars; but there are also several other benefits as well. For instance, once you have paid off your mortgage, if your disciplined enough, you can take the money you would be paying toward your mortgage and apply it toward a retirement account or college savings account for the kids. If you’re interested in paying off your mortgage early to save a few years’ worth of interest, there are actually several techniques you can employ to do just that.

One of the most popular techniques for paying off your mortgage early is to simply refinance to a shorter term mortgage. For example, if you currently have a thirty year mortgage, refinancing to a fifteen year mortgage can help you to significantly reduce the amount of time required to pay off your total mortgage. Use a mortgage payment calculator to find out exactly how much interest you can save. You should recognize that by reducing the term of your mortgage, your monthly mortgage payments will increase; but the overall interest savings can certainly make it well worth it. You may also be able to benefit from the lower interest rates that are commonly offered on shorter term mortgage loans.

Another option that will allow you to pay off your mortgage early and save money is to take advantage of a biweekly mortgage payment plan. The key to this technique is to send in just half of your regular monthly mortgage payment every 2 weeks. As a result, you are able to make what equals out to an additional payment each year. This is because some months have more weeks than others. While it might seem like making just one extra payment per year would not accomplish much, this method can actually take years off your mortgage. This can be a particularly advantageous technique for homeowners who are paid every two weeks. There is a downside to this method you should be aware of; however. Although some lenders offer this type of program, the great majority of them do charge a fee.

If that is the case, you might consider overpaying your mortgage every month instead. For instance, pay an additional 10% of your payment and ask that it be applied to the principal. The key to making this method work for you is to be diligent about sending in the extra amount every month and to also ensuring that the overage is applied to the principal and not the interest. Always check with your lender to make sure you will not be charged a penalty for paying off your mortgage early.

Paying off your mortgage early does require discipline and will also take a bit out of your monthly budget that might otherwise be spend on discretionary spending; however, the benefit of being able to enjoy a mortgage-free house years early is definitely worth it for most homeowners.