6 Easy Ways to Chip Away at That Mortgage Payment

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Not sure how to whittle down the thousands of dollars still owed on your home? Use these tips to save money on your mortgage and eliminate your monthly payment entirely!

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This post was originally part of my 31 Days to Radically Reduce Your Expenses series, which has been completely revamped and updated for publication. It contains over 70% NEW content not found anywhere on the blog! Learn more about the book your budget has been waiting for.

It's incredibly overwhelming to look at the thousands of dollars still owed on your home and wonder how you'll ever whittle it down. These 6 ideas significantly reduce your mortgage so you can eliminate your monthly payment entirely! #howtopayoffmyhouse #payoffmymortgage #mortgagesavings #mortgagefree #debtfree #mortgage

I know it might seem a little funny to talk about reducing your mortgage payment when it’s pretty much a permanent fixture in your budget for the next 30 years, but any opportunity you have to chip away at this expense in the long run, take it.

Our monthly mortgage payment for our home here in Florida takes up a BIG part of our budget. Plus, we have an additional mortgage for our rental property in NY. Yes, we are the proud {or not-so-proud} owners of 2 mortgages — ick!

While I would love to say that we’ve hustled like crazy to pay down both mortgages in our desire to become debt free, we haven’t. Instead, we were completely happy to cover our payment each month, while still having just enough of a cushion to enjoy the occasional eating out splurge and yearly vacation.

All that changed when we realized just how much we were spending in interest, and now I’m determined more than ever to pay off our mortgage in the next 10 years. Although, if stuff keeps breaking around here, we might not have too much to put toward it!

It can be overwhelming to look at the thousands and thousands of dollars still owed on your home and wonder how you’ll ever whittle it down, but these tips will help get you started:

How to Save Money on Your Mortgage:

1. Save Like Crazy – When you are first thinking about reducing any debt, you must save like a crazy person. Analyze every purchase and eliminate everything that doesn’t help you reach your goal. It’s not always fun, but think of how much you’ll be able to set aside toward that mortgage!

 2. Make One Extra Payment Per Year – Probably the easiest way to cut down on your mortgage is to make one extra payment per year. Depending on how much your mortgage is for, you could shave anywhere from 5-10 years off your loan. Plus, think of all the interest you’ll save!

3. Make Bi-Monthly Payments – If saving up for an extra payment seems daunting, split your monthly mortgage in half, and make bi-monthly payments every time you receive a paycheck. Essentially, you are practicing the same method as the extra payment method above, it’s just spread out over the course of an entire year instead of all at once.

4. Knock Out PMI  Private Mortgage Insurance might not seem like much tacked onto your monthly payment, but it’s still money you could be saving! Making extra payments like we talked about above is one step closer to getting your PMI removed. FYI – banks will not do this unless you ask them, so make sure to keep track. If you’re not sure what PMI is or how it works, this article explains all the trade-offs.

 5. Consider Refinancing  I am not a total expert in refinancing, but I do know that doing so could allow you to tap into lower interest rates and reduce your monthly payment. However, you will also have to go through another round of closing costs, which could range anywhere from $3,000-$5,000. You also need to take into consideration that the economy is bouncing back, and rates are not as low as they used to be.

6. Have Your Home Reassessed – During the financial crisis of 2008, housing prices and values dropped considerably, which had a domino effect on tax values. Research the market to see if you might be eligible for a reassessment and tax break.  Realize though, that this is a gamble, and the value of your home solely rests on someone with the ability to lower or raise your taxes. You can’t ever be sure which one it is!

Need to Reduce Even More Monthly Expenses?

Whether you crave extra room in your budget, or want to save towards a future goal, 31 Days to Radically Reduce Your Expenses is your must-have resource to tackle both.

This book is jam-packed with practical advice to slash costs, lower monthly bills, and put more money in your bank account every month!

How do you plan to reduce your mortgage?

Get a peek at the Table of Contents and download a sample chapter HERE. Or, if you’re ready to take the plunge, you can purchase this guide directly on Amazon.

Disclosure: Some of the links in the post above are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. Read my full disclosure policy here.

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  1. Is there any easy way to print/create/save an amortization schedule that takes into account an extra payment/month? We make it a priority to contribute an extra $100/mo to our mortgage principal and have been doing so for the past year. What would an amortization schedule look like to reflect this additional contribution?

    1. First – You want an amortization schedule that has 3 columns for each payment: Principal, Interest, & Total payment.

      So here is the trick – when you make that extra principal payment {make sure your bank is treating it as a principal payment!} you are saving yourself future interest. So, when you write the actual check – you can cross that amount off of the principal amount for the last date of your amortization schedule. IGNORE the interest of that payment and just pay the principal amount. Then as you make each new principal payment you keep working your way up from the bottom.

      If you have already made several principal payments, just total them up and work your way up from the bottom of your amortization schedule to see where you are at!

      I hope that helps, Ali! Let me know if you have any more questions!

  2. Wow, this came at a great time. We are actually going today to discuss buying a new house. I was worried about the mortgage insurance, but now I now what to ask for and how much I would need to put down to have it fall off later. Thanks

    1. I’m so glad you found this helpful! Be sure to check with your mortgage provider that you actually can get the PMI taken away when you reach a certain point. When we purchased our house in New York the PMI rules were different than they are here in Florida.

    1. You’re welcome, Kendra! And I may or may not have just pinned a whole bunch of posts from your site — you are a very talented designer! πŸ™‚

  3. I found you through the 31 days challenge and can’t wait to go through your posts and tips! We just took on our first mortgage this year and are trying to pay above and beyond so we get ahead. My monthly budget is looking pretty lean as a result so looking forward to finding some new ways to trim $$!

  4. Great tips! We have been tackling our mortgage. I too hate how much interest we pay! We’ve had our “30 year mortgage” for just over 3 years and hope to pay it off in the next 2-3 years! It’s difficult to believe 5-6 years total and we will be completely debt free! Best wishes with your mortgages!

  5. I’ve been a sahm for the last 13 years. Hubby and I bought our first house back in 2001 at age 19. I so wish we would have stayed in that house, we would for sure be close to paying it off. Our goal is to pay this house off in the next 10 years. Thanks for the tips!

  6. We bought our house 2 1/2 years ago and took out a 30 year mortgage. We immediately started paying biweekly accelerated payments and then this past January started making weekly accelerated payments. In 2 1/2 years we went from a 30 year mortgage down to 14 1/2 year mortgage. YAY! Go Us πŸ™‚ . Our mortgage payments were not too high but neither was/is our income.

  7. We’ve made bimonthly payments since we bought our house 8 years ago. We also refinanced a couple of years ago. Instead of paying the new, smaller payment, we’ve continued to make the higher, original payment. The extra money is all applied to the principal. We’re looking forward to the day when we are mortgage free!

  8. Ironically, I have been contemplating going to bu-monthly mortgae payments, especially if it goes up about $15/mo which is what I’m projecting based on the shortage in my escrow payment based on the real estate taxes that have been paid.

    1. It is so frustrating to see that shortage at the end of the year and know your payment is going to go up!

  9. Every time my husband gets a raise, I calculate the take home amount and add that to our bi-weekly payments. I also contacted our bank and asked to have the PMI removed. We have an FHA loan, so they told me that as soon as we get to 78% loan to value they will remove the PMI automatically. That’s in another year, but I will then add that to the extra payment amount. I will have our 30 mortgage paid off in 15 years this way!

  10. I don’t know that we will ever get our home paid off early, but I am a month ahead on the payments. For example, at the end of September I was making the November mortgage payment. It took a while for me to be able to do that, but we have stuck to it for almost a year and I can really see the interest savings & the balance decreasing faster. I hope to be able to get 2 months ahead someday. We have student loans hanging over our heads that are strangling us, and since my husband had to get his Masters degree for his job (just graduated, finally) we now have another $15k additional debt added to the load. We will be lucky to get our loans paid off before our 9 & 11 yr old sons graduate from college. Hubby works in a low income school district & I’m SAHM for past year due to medical issues. It’s been very tough lately.

    1. It sounds like you are definitely on the right track, Laura — 2 months ahead in mortgage payments a lot more than what the average homeowner is doing! You WILL get through this!

  11. Love this article! I just signed up for this course! I love the idea of paying an extra payment every year. Right now, our budget is super tight so we can’t pay extra each month, but we will start doing that once we are able to! πŸ™‚

  12. Great reminders! We just purchased our house this past June and our goal this month is to start bi-monthly payments and to pay an extra payment per year. Right now we are paying down our student loans and once that is done we will pay down our mortgage more aggressively. For now, those are the two things we can do to reduce interest!

    1. Too funny – we just purchased in June as well! Every little bit helps and I think bi-monthly is the perfect choice for your situation right now!

  13. Soooo looking forward to this series. We recently bought a house and put a good chunk of money into a renovation. We are officially house poor and feeling a tad stressed. This is the jump start we need to get back on track!

    1. Oh girl, I feel your pain! We spent so much in renovations for our first home {which is currently a rental}, that it actually affected us being able to buy a second home – so frustrating! Glad to have you here, Ali!!

  14. We’be only paid $50 a month extra and over 5 years you would be surprised at how much it’s save on interest!

    1. Very true! And when you really think about it, $50 is just 2-3 times a month of eating out expenses {depending on where you go}, so if you sacrifice a little bit a “luxury” to work on that mortgage, I’d say the trade-off is definitely worth it!

  15. We are currently using Smart Payment Plan and they take money out every check and then apply it to the mortgage. We also round up our payments to the next hundred and pay a flat amount. Doing this is shaving 2 years off our 15 year loan which means the countdown is on to December 2025 when we are scheduled to pay it off but I’m thinking we will take savings and pay it off in Spring! Stoked that I will be mortgage free by 43!!!!!

    1. Woo hoo! That is awesome! And I love your idea to round up the payments — that makes putting a little bit extra toward your mortgage super simple!

  16. We went with a 15 year mortgage because the interest rates were so much lower, and we would essentially be saving enough to buy another house over the life of the loan!! If you are considering refinancing, it is definitely worth it to look into something like that as well. We also have a fair amount of land and had the majority of it re-zoned to agricultural through a Forest Management Plan – this dropped almost $1,000 off our tax bill each year! Also – consider raising your insurance deductible to lower your premium.

    1. Great tips, Kelly! I never even thought about rezoning, but that’s definitely something to look into!

  17. Love this article! Great way to start off this challenge. I thought I’d add a way for those that are Georgia residents that you can save on your property taxes by filing for a Homestead Exemption. Call your local tax commissioner and they can tell you how to fill out an application (super easy) and how to file it. It saved us hundreds! πŸ™‚

  18. This is great! Thank you for the link to the PMI explaination…. We are currently in the process of massive saving so we can rent out this home in the spring/summer and make our move to a better school district the next fall. Ugh, the insane amount of stress.

    I’m curious, since you do the rental thing, what are your thoughts/tips/suggestions on owning a rental property.

    Thanks!! So glad you are doing this series!

    1. So glad you are here, Heather! Let’s see….I could probably do a whole series on rentals, but here are a few of my thoughts:

      – Work on creating a SOLID rental agreement and cover just about everything you can think of. I can even send you ours if you need ideas on what to include. I think ours is 6-7 pages, but it has saved us from arguments with our tenants because they can see the rules in black-and-white. That being said, I would research your city/state tenant laws to see what you can and cannot reasonably include. For instance, in our NY rental, we are not allowed to charge extra or restrict from having a family member or significant other come live with them. And we can’t even require them to be added to the lease!

      – Get everything in writing. Even if you have oral discussions with the tenant, or talk about something on the phone, I would always send a follow up email giving a brief outline of your conversation. You never know when this will come in handy.

      – When choosing tenants, do a credit check, but go with your gut feeling. No, you can’t discriminate, but you can say you weren’t able to accept their application because of their credit score.

      Goodness, I probably have a lot more, and feel free to email me with specific questions if you have them {[email protected]}, but I hope that is at least a little bit helpful for you!

  19. Since we bought right before the crash, we ended up being upside down on our house. A few years ago, we worked our butts off to pay off the second mortgage, which allowed us to refinance at half the percentage rate. We also make an extra payment each year, since we base our payments on my husband’s bi-weekly paycheck instead of a monthly rate. Every little bit helps!!

    1. Yes it does! We bought soon after the crash, but in an area that is years behind the market, so we paid way to much for a property that is worth about half what we paid for it. *Sigh*

  20. We refinanced last year and that cut over $100 off our monthly payment! It was just in time since I am now a SAHM mom. We aim to make one extra payment a year, often times using our tax refund to do so. Other than that, we’re working on saving what we can, hence my 31 day series on savings! I’m looking forward to following along on yours!

    1. Thank you for sharing about refinancing, Kristen! You always wonder how much will be shaved off your payment, and $100 really adds up over the course of a few years! That’s also a great idea to use your tax refund to help pay down the mortgage. Definitely going to go check out your series!

  21. We have 29 years left and I have never considered paying it off early, mostly because we have so much other debt. I’m going to look into our mortgage insurance issues and try to find a way to cut it out. I’d love to pay our mortgage off in 15 years. Not anything drastic compared to some, but I’m a SAHM and minister’s wife. The budget is very limited!

    1. Keep at it, Stacy! I’m a SAHM with a parochial school teacher husband, so I understand completely how tight ministry budgets can be. We worked at paying off all our other debt first before tackling our mortgage. Do what you can because every little bit counts!

    2. I have some friends in ministry, and yes, the income is often very small compared to other jobs {yet they are the ones doing the greatest work!} — focus on what you can, and prioritize your debt. Depending on interest rates, you might need to tackle student loans, credit cards, etc, first, before you work on the mortgage. And like Kristen said, every little bit helps!

    3. I too am a SAHM or as I like to call myself, household manager. I clean houses a few times a month but I have never “worked” outside of my home. My kids are teenagers now. The time with them was worth every coupon I clipped, every thrift store purchase I ever made. P.S. we live on less than 50k a year and very comfortably, too. Stay with it. You won’t regret it.

  22. Look at your homeowners insurance. I did. I paid for a new home inspection and went to a independent insurance agent who found a policy for HALF price. It literally cut my monthly mortgage payment in half. I plan on having a annual homeowners insurance review. *Side note- if you are going to carry debt, your mortgage is consider “good” debt. The interest is lower than your credit cards. Credit cards are “bad” debt. Eliminate those first, then make extra payments to your mortgage.

    1. Yes! Completely agree that if you have credit card debt, DEFINITELY focus on paying those off first. The interest rate between a card and a mortgage is astronomically different! Also, stay tuned because we are going to cover homeowner’s insurance on Day 5!

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