Money decisions can feel complicated—but they don’t have to be. I’m here to help you simplify the process, avoid common pitfalls, and stay true to your values.
Let’s talk about a mortgage payoff strategy that’s easy to overlook—but powerful if applied consistently: making extra payments.
There are two popular ways to do it:
Option 1: Make One Extra Payment Per Year
Instead of your regular 12 monthly payments, you make 13—just one more each year. That extra goes entirely toward your loan principal.
The Impact
Let’s say you have a $400,000 mortgage, a 30-year term, and a 5% interest rate.
Your monthly payment (excluding taxes/insurance) is about $2,147.
By making just one extra payment of $2,147 per year:
- You’ll pay off your loan 4 years and 4 months early
- You’ll save about $63,000 in interest
Option 2: Make One Extra Payment Per Quarter
That’s four extra payments a year, spaced out over time—one every three months.
The Impact
Same scenario: $400,000 loan, 30 years, 5% rate.
By making an extra $2,147 payment every quarter:
- You’ll shave 11 years off your mortgage
- You’ll save over $136,000 in interest
Why This Works
Mortgage payments are front-loaded with interest. Early on, the majority of your payment goes to the bank, not your principal. When you add even a small amount to principal early and consistently, you reduce future interest and accelerate payoff. It’s compound interest in reverse—working for you, not against you.
How to Make It Happen
- Automate it: Set up recurring transfers—monthly, quarterly, or lump sum annually.
- Round up your payments: Even rounding to the nearest hundred makes a difference.
- Use bonuses or tax returns: A single large payment once a year can give you a huge head start.
A Quick Word of Wisdom
If you’re younger and investing is a priority, a hybrid approach might work well: put half toward mortgage payoff and half into long-term investments. That way, you reduce debt while building your future.
Wherever you are on your financial journey, remember—your money is a tool, not a trophy. It’s meant to reflect your values, fuel your purpose, and honor God in the process.
You don’t have to figure it out alone. I’m here to walk with you—one wise, faith-filled decision at a time.