How to pay off a 30-year mortgage in 15 years

How to pay off a 30-year mortgage in 15 years
March 18, 2022 | Jamie Smith

If you have a mortgage, it may feel like you'll never be done paying it off. Fortunately, you have the option to pay off your mortgage early if you are financially able. This will reduce the amount of interest you pay and you'll never have to worry about getting that payment to the bank on time again. Here are some of the benefits of paying off your mortgage early and ways to free yourself from debt faster.

The benefits of paying off your mortgage early

Paying off your mortgage early gives you the opportunity to invest the money that would otherwise go toward your monthly payments. You'll be able to save for retirement much faster, and you won't have to worry about mortgage payments once you retire. 

You can add the money to a 401(k) or IRA, invest in stocks, or even buy another home. With a second home, you can rent out the property and collect regular rent payments from a tenant to pay your mortgage. However, you could have to deal with unexpected expenses from things like storm damage. Paying off your mortgage early can also give you the opportunity to allocate the money you would usually spend on a mortgage payment to an emergency fund or savings account. You could also use the money for things like home improvement or perhaps to take the vacation that you and your family have always dreamed about.  Lowering your mortgage balance faster means you can stop paying for private mortgage insurance (PMI) sooner as well.


Refinancing your mortgage can lower your interest expenses, especially if you choose a shorter term. Your monthly payments may be higher, but you can save thousands of dollars over time by getting rid of your debt faster. For example, someone with a $250,000 mortgage and a 30–year term at 3.75% annual percentage rate (APR) would pay about $1,150 per month. That adds up to $13,800 per year and a total of $414,000 over 30 years, which leads to a significant amount of money paid just in interest. 

With a 20-year term at 3.625% APR, the monthly payment would be $1,450. That adds up to $17,400 per year for a total of $348,000 over 20 years. The borrower would have to come up with an extra $300 per month, but they would finish paying their mortgage a decade sooner and save more than $65,000 in interest over that time period.

Even if you choose a new mortgage with a similar term, refinancing and making the same monthly payments could be worth it. With a lower interest rate, more of each payment will go toward your mortgage's principal, or the amount you owe, and build equity in your home. However, you'll need to make sure that the new rate is low enough to offset any closing costs or other refinancing expenses.

Pay off high-interest debt first

If you have credit card debt, a car loan, or other obligations, you should focus on paying those off before you work on paying your mortgage faster. Many credit cards have interest rates that are over 20% and you will save more by taking care of that debt as soon as possible. If you have enough equity in your home, you can refinance high-interest debt to a HELOC or home equity line of credit. This lets you pay off high-interest balances immediately and then focus on your mortgage.

Make extra payments

If you don't think refinancing will improve your interest rate or you have plans to move soon, you can make additional payments on your existing mortgage to pay it off faster. Most mortgage loans issued after 2014 don't charge prepayment penalties after the first three to five years of the mortgage, so most people won't need to worry about this. However, you should check with your lender before you start making additional payments. 

Many people make bi-weekly payments to add an extra payment each year. They pay half their mortgage every two weeks instead of paying the full amount once per month. You can also add an extra monthly payment at the end of the year or if you get extra cash from your income tax refund or yearly bonus from your employer. This can help you shave several years off your mortgage term and save a lot on interest. Even if you are unable to do these things, there are other ways you can allocate additional money towards extra payments on your mortgage.

Be frugal

Before you can start paying off your mortgage faster, you need to find the cash required to do so. Making extra payments or increasing your payments may seem intimidating, but you can get the money by making some small changes. Cooking at home more often, instead of ordering out, can help you save money.

Limit yourself to one streaming service or other media subscription and shop at thrift and discount stores when possible. Visit parks, museums, and other places that don't require a purchase or an admission fee for leisure activities. You can also save on transportation costs by asking your employer if you can work from home, occasionally or permanently.

Get a second job

One of the fastest ways to pay off your mortgage is by increasing your income with a part-time job and putting those additional earnings towards your mortgage payments. You won't have to reduce your expenditures for things like vacations and clothing, and you can increase your work experience. You can also start monetizing your hobbies. If you enjoy art, you could create and sell original artwork.

Consider an adjustable-rate mortgage

An adjustable-rate mortgage (ARM) starts with a low introductory interest rate that rises after a specified period of time. That low rate means more of your payments will go toward your mortgage's principal and you can build equity in your home faster. However, you should be prepared to make higher payments or refinance when the interest rate rises. An ARM is ideal if you plan to move within a few years. You can take advantage of the low initial interest rate and get more cash for your next residence when you sell your home.

Get a step closer to your dream home

Looking for the perfect home? Alliant has mortgage loan options to fit any budget.

You might like

Sign up for our newsletter

Get even more personal finance info, tips and tricks delivered right to your inbox each month.