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How to Pay a 30-Year Mortgage in 15 Years

Written by Marc Guberti

Marc Guberti is a Certified Personal Finance Counselor who has been a finance freelance writer
for five years. He has covered personal finance, investing, banking, credit cards, business
financing, and other topics.
Marc’s work has appeared in US News & World Report, USA Today, Investor Place, and other
publications. He graduated from Fordham University with a finance degree and resides in
Scarsdale, New York.
When he’s not writing, Marc enjoys spending time with the family and watching movies with
them (mostly from the 1930s and 40s). Marc is an avid runner who aims to run over 100
marathons in his lifetime.

Updated May 15, 2024​

5 min. read​

Many homeowners use mortgages to buy their properties. Mortgages break the high purchase price into reasonable monthly payments. Although you may start out with a 30-year mortgage to reduce your monthly payments, it’s possible to pay off your mortgage early. Some people pay off their 30-year mortgages in 15 years or less, and this guide will reveal how you can join them.

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Understanding 30-Year Mortgages

A 30-year mortgage breaks your home purchase into monthly payments. You will typically have to provide a down payment, and then the bank will cover the rest. A higher down payment will reduce your monthly mortgage payments.

Home buyers can choose between fixed-rate and variable-rate mortgages. Fixed-rate mortgages have the same monthly payment from start to finish. Conversely, variable-rate mortgages have fluctuating monthly payments based on changes to interest rates. Variable-rate mortgages usually start out with lower monthly payments than fixed-rate mortgages.

Can You Pay Your Mortgage Off Early?

It’s possible to pay off your mortgage early. Lenders won’t stop you from making early payments, but some of them have prepayment penalties. If you are shopping around for mortgages, check with the lender if there are any penalties for paying off the mortgage early.

Are There Advantages or Disadvantages to Paying Off a Mortgage Early?

Paying off your mortgage early gets you out of debt sooner. You’ll have more room in your budget for other expenses and can have greater peace of mind. However, it’s not all advantages. Paying off your mortgage early means missing out on investment opportunities that could have made you wealthier. Some mortgage lenders also have prepayment penalties associated with early mortgage payments.

Strategies on How to Pay a 30-Year Mortgage in 15 Years

It’s possible to get rid of your 30-year mortgage in only 15 years. These are some of the strategies you can use to own your property debt-free.

Understanding Your Financial Capacity

You shouldn’t overcommit to paying off a mortgage sooner. Putting too much additional cash toward the monthly payment can strain your finances for emergency expenses and living costs. If you can afford an additional $100/mo toward the mortgage payment, don’t try to overstretch yourself to $500/mo at the risk of being financially vulnerable in other areas. You don’t want to make higher mortgage payments only to end up taking out a home equity line of credit.

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Creating a Budgeting Plan

A budgeting plan allows you to map out how much additional mortgage payments you can afford to make. You can set realistic goals and determine what changes are necessary to make higher monthly mortgage payments.

Homeowners should write down their income and list their monthly expenses. Knowing the gap between your income and expenses can help you calculate your additional monthly mortgage payment. It’s also a good idea to determine how to budget your other financial objectives. For instance, most people should max out their retirement account contributions if they have additional funds. Knowing all of your financial goals and prioritizing them will make it easier to use your money more effectively.

The Importance of Extra Payments

Your standard monthly mortgage payment includes interest. When you are making payments on a 30-year mortgage that just started, most of your payments will go toward interest. The amortization schedule ensures that it takes a while before more than half of your monthly mortgage payment goes toward the principal.

However, when you make an additional monthly payment, that entire payment goes toward the principal. Trimming your principal with additional monthly payments will speed up your path to a debt-free home since interest does not get in the way of bonus payments.

Making Biweekly Payments

Biweekly payments allow you to schedule your additional mortgage payments instead of making them on a whim. Two payments per month can help you get out of debt much sooner than 30 years.

Modifying The Existing Mortgage

You can modify your existing mortgage and make it shorter. While a shorter mortgage term results in higher monthly payments, you will get out of debt sooner. Homeowners should assess how the heightened monthly payment will impact their budgets. While you can take a break from an additional monthly mortgage payment if necessary, you must make the minimum monthly payment.

Some mortgage lenders let you adjust your current mortgage and keep the rate the same. However, you may have to refinance in other cases. Refinancing may not be the best choice if your current mortgage has a low-interest rate. However, you can end up with a better rate if your credit score has significantly improved since you got your current mortgage.

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Recasting Your Mortgage

If you have extra cash sitting around or receive an inheritance, you have the option to make a lump sum payment toward your mortgage. The lender will then readjust your mortgage and assign a new amortization schedule. For instance, if you receive a $100,000 windfall and put it toward your $500,000 mortgage balance, you only have $400,000 remaining on your mortgage. You can then end up with lower monthly payments or a shortened loan term.

Paying Off Other Debts

Becoming free of your mortgage debt will reduce your financial stress and put you in a good position leading up to retirement. However, you shouldn’t neglect your other debt. Some balances have higher interest rates, such as credit card debt. Paying off this debt and other balances will give you more time to prioritize your mortgage payments once you pay them off. After you pay off your debt in other areas, make sure you minimize how much additional debt you incur while making mortgage payments. Homeowners should ensure they are never spending more than what they can afford to pay.

Downsizing Your Home

Moving into a smaller home will result in a smaller mortgage balance. Not only can you get out of debt sooner by downsizing, but you will also end up with lower property taxes and home insurance premiums.

Homeowners can also downsize into areas with lower costs of living. It’s a common strategy as people approach retirement to stretch out their wealth. Individuals who work remotely have more flexibility with where they can move to downsize. Depending on your property and the home listings that are up for sale, you may be able to downsize in your local area.

Cutting Expenses and Making Lifestyle Changes

Many financial institutions make it easy to track expenses. You can review your monthly credit card and bank account statements to see where your money goes. While some expenses are necessary, you may discover a few costs that you can easily remove. For instance, you may have monthly subscriptions to multiple streaming platforms that you rarely use. Canceling some or all of those subscriptions will free up space in your budget to make additional mortgage payments.

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Refinancing to a Shorter Term Loan

Shortening your mortgage loan will result in higher monthly payments. You will also have to contend with closing costs, which can increase the size of your loan. You have the option to pay the closing costs at the closing instead of tacking them onto the backend of your mortgage.

However, you will get out of debt sooner. This approach is optimal for people who recently received raises and aren’t letting lifestyle creep disrupt their finances. Putting the extra money to work toward monthly mortgage payments will free up your budget as you get closer to retirement.

Refinancing to a shorter term loan with a cash-out refinance from Top Flite Financial can help you pay off your mortgage faster and save money in the long run. By working with Top Flite Financial, you can explore options to refinance to a shorter term loan that aligns with your financial goals and timeline. Their experienced team will guide you through the process and help you determine if this option is right for you. Plus, you can qualify even with a not-so-perfect credit score.

Don’t wait any longer to take control of your financial future. Contact Top Flite Financial today to discuss refinancing to a shorter term loan and start the process of saving money on interest payments over time and paying off your mortgage faster.

How to Determine Which Strategy is Right for You

You can choose from several strategies to pay down your mortgage sooner. It’s possible to pay off a 30-year mortgage in 15 years, and you don’t have to rely on a single strategy. You’ll make more progress by combining multiple strategies. Homeowners can track expenses and look for ways to free up more space in their budgets. Creating a plan and knowing how much you can realistically pay toward the mortgage each month can keep you encouraged instead of stopping after a few months.

As you embark on this journey and make multiple mortgage payments each month, you will have a better understanding of what works for your finances. Seeking career advancement opportunities and working on some side hustles temporarily can accelerate your path to a debt-free home.

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Frequently Asked Questions

What happens if you pay 2 extra mortgage payments a year?

Making two extra mortgage payments each year can get you out of mortgage debt sooner. You can pay off your entire balance a few years early instead of making monthly payments for 30 years. Additional monthly payments allow you to reduce your principal faster.

Is it cheaper to pay off a 30-year mortgage in 15 years?

It is cheaper to pay off a 30-year mortgage in 15 years since you make more progress with the principal. Mortgage lenders use amortization schedules for 30-year mortgages that put the interest payments in the front. Most of your early payments go toward interest, while most of your mortgage payments near the end of the term go toward the principal.

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