Cut Years off your Mortgage
written by Mike Ballew March 31, 2024

Your mortgage payment is likely the biggest bill you face each month. Would you like to stop paying it? This is the secret to cutting years off your mortgage.

Tomorrow Never Comes

Tomorrow never comes: that is the way many of us live our lives. Max out your credit card, you’ll never have to pay it off. Eat like a glutton and ignore your health, there won’t be any consequences. Get the longest loan available, because tomorrow never comes.

News flash: tomorrow comes. You will pay every penny you charged to your credit cards, plus interest. And you will pay and pay and pay on that 30-year mortgage, virtually all of your working life.

Cut Years off your Mortgage

Most every type of mortgage allows you to pay more than your normal payment. That is how you cut years off your mortgage. You make payments at the 15-year rate and pay off your mortgage in half the time. 

The extra money paid each month goes toward the principle, which in turn reduces the total interest paid and shortens the life of the loan. An even better approach is to get a 15-year mortgage in the first place. That way you also receive a lower interest rate.


Let’s look at some numbers. Suppose you purchase a home for $350,000, you put $70,000 down, so you need a mortgage in the amount of $280,000. Let’s say the annual property taxes are $5,000 and the homeowner’s insurance is $1,500 per year. 

The average APR (annual percentage rate) on a 30-year fixed mortgage is 7.5%. For a 15-year mortgage, it’s 6.6%. This is what your payments look like for a 30- vs. 15-year mortgage including principle, interest, taxes and insurance:

30-Year Monthly Mortgage Payment: $2,500

15-Year Monthly Mortgage Payment: $2,995

The payments for a 15-year mortgage are $495 more per month. For just a little bit more, you pay off the mortgage in half the time.

The lower APR combined with the shortened loan term results in a dramatic interest savings. Here is the interest on that same home for a 30- vs. 15-year mortgage:

30-Year Mortgage Total Interest Paid: $425,000

15-Year Mortgage Total Interest Paid: $162,000

The 15-year mortgage results in a $263,000 savings. That’s over a quarter of a million dollars!

Bottom Line

The payments on a 15-year mortgage are higher than a 30-year mortgage. But like anything else, if you set your mind to it, you can do it. Don’t follow the other lemmings off the 30-year cliff. Pay off your home in 15 years.

Tomorrow comes. It does. In the grand scheme of things, 15 years is not a long time. It will be here before you know it. And when it comes, if you have a 30-year mortgage you will only be halfway done paying it off. Wouldn’t it be nice to be totally done? Be smart with your money and pay your mortgage at the 15-year rate. You’ll be glad you did.

Photo credit: Freepik Eggstack News will never post an article influenced by an outside company or advertiser. Our mission is to help you overcome uncertainty about retirement planning and inspire confidence in your financial future.
Retirement Tightwads
December 10, 2023
Eggstack founder, Financial Planning Association member, engineer, and software developer.