Paying off a $200,000 mortgage in 15 years requires paying approximately $ 1 , 300 $ 1 , 3 0 0 – $ 1 , 400 $ 1 , 4 0 0 per month (principal and interest, assuming a 6-7% rate) or adding an extra $ 600 $ 6 0 0 – $ 700 $ 7 0 0 monthly to a standard 30-year payment. Key strategies include switching to biweekly payments, applying windfalls (bonuses/tax refunds) to the principal, or refinancing to a 15-year term.
Make extra payments toward the principal
A large part of your monthly mortgage payments goes toward the principal and interest. One way to pay off your loan faster is by making extra payments to the principal only, says Forbes.
The Short Answer. Making just one extra payment per year on your mortgage can significantly reduce your loan term and save you thousands in interest over time. Making 2 extra mortgage payments a year can lead to substantial savings on interest and help you pay off your mortgage years earlier.
Ways to make extra payments on your mortgage
"Mortgage rates are usually 1 to 3 percentage points higher.” Ultimately, Ramsey stuck to his evergreen advice: Hold off on buying if you still have debt, lack a fully funded emergency fund, or haven't saved for a down payment, or if a 15-year fixed-rate mortgage would eat up more than 25% of your take-home pay.
Ways to pay off your home loan faster
Mortgages are secured loans, so there is the risk of losing your home (via repossession by lender) if you default on repayments.
The 3-7-3 Rule in mortgages isn't a loan type but a federal timeline from the TILA-RESPA Integrated Disclosure (TRID) rule, ensuring borrower protection by mandating disclosures within 3 business days of application, a 7-business-day wait between the initial Loan Estimate and closing, and another 3-day wait if significant changes (like APR) occur, giving borrowers time to review costs before committing to a loan.
Pay extra toward your mortgage principal each month: After you've made your regularly scheduled mortgage payment, any extra cash goes directly toward paying down your mortgage principal. If you make an extra payment of $700 a month, you'll pay off your mortgage in about 15 years and save about $128,000 in interest.
The main downsides of prepaying are tying up cash that could earn more elsewhere (like investments), potential prepayment penalties from lenders, reduced liquidity for emergencies, and missing out on the time value of money, especially if your loan interest rate is low; it also means losing potential tax deductions and can complicate financial aid.
The main cons of paying off a mortgage early include losing the mortgage interest tax deduction, facing opportunity costs (missing higher investment returns), and reducing your financial liquidity (tying up cash in your home instead of having it accessible). You might also incur prepayment penalties (though rare on conventional loans), and it can slightly lower your credit score by removing a large, established debt, according to U.S. Bank.
Make Overpayments Regularly
One effective way to pay off your mortgage faster is by making overpayments. Essentially, this means paying more than the standard monthly amount. Even small additional payments can reduce the interest you owe and shorten your mortgage term over time.
The "10/15 mortgage rule" is a strategy to pay off a 30-year mortgage in about 15 years by consistently paying an extra 10% of the principal amount each month (or equivalent weekly/bi-weekly payments), significantly reducing total interest and achieving homeownership much sooner, though it requires significant discipline and financial commitment. It works by accelerating principal repayment, which cuts down the loan term and interest, effectively transforming a 30-year loan into a 15-year one.
Not Putting Extra Payments Toward the Loan Principal
Otherwise, you may not see much progress in your early mortgage payoff efforts because your extra payments will be absorbed by interest.
Suze Orman strongly advocates paying off your mortgage by retirement for financial freedom and peace of mind, but her advice on how varies by situation, often prioritizing a solid emergency fund and retirement savings first, especially if interest rates are low. While she pushes for paying down debt aggressively (even reducing retirement savings beyond the 401(k) match), she cautions against draining savings for low-interest mortgages if it leaves you vulnerable to job loss or emergencies, suggesting you should have a strong safety net before using savings to pay it off.