If you are like most people, you have a 30-year mortgage on your home to pay off. That might seem like an eternity, but there are a couple of different strategies that you can use to pay off that mortgage early.

What most people are unaware of is that when you do get a mortgage, most of your interest is charged upfront. Banks are in the business of making money, so they want to make sure they get their money upfront.

For the first 18.5 years of that 30-year term, you’ll be paying more in interest than on the principal loan amount. When the average homeowner sells after seven years, they don’t even get to the portion where they’re actually knocking down the principle. Here are a few ways to pay off your 30-year mortgage a little sooner without a ton of extra effort:

1. Get a 15-year mortgage and a lower interest rate. When you get a 15-year loan as opposed to a 30-year loan, you tend to get a lower rate. You also have less to pay in interest on the loan. At the end of the day, you end up saving thousands in the process.

2. Making bi-weekly payments. Grab your mortgage payment and look at the payment breakdown. Instead of making, one $1,000 payment, for example, you make two $500 payments each month. When you do this, you end up making 26 mortgage payments a year. That equates to 13 monthly payments instead of 12 without you even noticing. This will save you eight years of payments, on average.

“The best strategy is whichever one fits your lifestyle and budget.”

3. Making an additional mortgage payment. If you get a big tax refund or bonus at work, think about making an additional mortgage payment instead of going on a vacation or buying a new car. Make sure you note that the payment “Be applied directly toward the principle.” That will help you knock years off of your loan term.

4. Refinancing for a lower rate or to remove mortgage insurance. If you have a $1500 payment and it goes down to $1,300 with a refinance, that’s $2,400 per year you’re saving. However, If you keep making the same payment of $1,500 after you refinance, you can pay down your mortgage much quicker.

Which strategy is the best? Whichever one fits your lifestyle and budget. What is good for you is not necessarily good for your neighbor.

If you have any questions or want my help with this, please give me a call or send me an email. I would love to hear from you soon.