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Sync Your Mortgage Payment and Your Paycheck Cycle to Painlessly Pay Your Mortgage Off Early

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Painlessly pay off mortgage FASTER with this easy tweak you can make to your mortgage payment. It just takes one phone call!

My husband and I purchased our first home in 2009. Originally our loan was 5.5% over 30 years. When the interest rates plunged even lower over the last few years, we worked on refinancing our mortgage and took advantage of a refinance deal to get our rate to 3.5% for a 15-year mortgage.

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Shaving 15 years and approximately $103,000 in interest off of our original loan was quite liberating.

But what if you don’t want to refinance your mortgage or consistently increase your monthly payment amount in order to pay your loan off early?

There may be a third and less painful option for those of you who want to payoff mortgage early (and honestly, who doesn't want to know how to pay off mortgage faster?).

How Can I Pay Off My Mortgage Quicker?

If you and/or your spouse is paid on a weekly or bi-weekly schedule, then you will have at least two extra paychecks per year.

  • Paid Weekly: There are 52 weeks in the year. If you divide 52 by 12, you will see that it is not an even 4. This means that not every month has four weeks. Most months do; however, several months out of the year have more than four weeks. This means that in at least two months during the year, if you are paid weekly, then you will receive an extra paycheck.
  • Paid Bi-Weekly: There are 52 weeks in the year, meaning that if you are paid bi-weekly, you will receive 26 paychecks instead of the 24 paychecks people who are paid bi-monthly on specific dates will receive.

It’s not that you make extra money, it’s just the way your pay is scheduled for disbursement.

Bonus: looking for another, QUICK, way to pay off your mortgage faster? Shop around for cheaper homeowner's insurance using one of my 9 strategies (they're free!) and add your savings onto your next mortgage payment.

Why this Makes a Difference

If you how to manage your money is based on your “normal” months (either 4 paychecks per month if you are paid weekly, or 2 paychecks per month if you are paid bi-weekly), then these extra paychecks can be a mini-windfall.

Match Your Mortgage Payments to Your Paycheck Cycle

By timing your mortgage payment to your paycheck cycle (weekly: ¼ of the payment is sent each week, or bi-weekly: ½ of the payment is sent every other week), you'll actually be making one extra mortgage payment per year with money you have not already counted on having.

You better believe that will pay off mortgage faster!

Examples: Let’s say you make $3,000 per month (we will assume 25% tax bracket), and your monthly mortgage payment is $1400.

  • Paid Weekly: If you are paid weekly, then your paycheck is approximately $562.50. You could time your mortgage to be paid weekly, making ¼ of the full payment each week, or approximately $350 per week. At the end of the year, you will have made a total of 52 ¼ mortgage payments (totaling 13 payments), and have paid an extra $1,400 of your mortgage.
  • Paid Bi-Weekly: If you are paid bi-weekly, then your paycheck is approximately $1,125.00. You could time your mortgage to be paid bi-weekly, making ½ of the full paycheck every other week, or approximately $700. At the end of the year, you will have made a total of 26 ½ mortgage payments (totaling 13 payments), and have paid an extra $1,400 of your mortgage.

How to Get Around Fees Associated with Some of These Pay Off Mortgage Faster / Early Programs

Some mortgage lenders will charge you money to set up automatic withdrawals in accordance with your paycheck cycle through a bi-weekly or weekly payment program. I checked with our lender, and fortunately they do not charge a fee.

However, if yours does when you payoff mortgage faster, then don’t worry—there’s generally a way around paying it. There’s also a way to set this up even if your mortgage lender does not offer a bi-weekly or weekly payment program.

Here are a Few Alternatives:

  1. Set-up an Account to Catch the Extra Payments: You can automatically withdrawal ¼ of your mortgage payment from your weekly paychecks, or ½ of your mortgage payment from your bi-weekly checks into an account where you will pay your mortgage from. Then once a year, send in a lump sum extra payment to your mortgage company. Be sure to notify your bank that this payment is to be taken off of the principal loan amount, and not applied towards interest.
  2. Manually Send in Extra Payments in the Extra-Paycheck Months: You can simulate a bi-weekly or weekly payment program by manually writing an extra check to your lender in the extra-paycheck months and designating the payment to be applied to the principal loan amount.
  3. See If You Can Send Bi-Weekly 1/2 Payments or Weekly ¼ Payments without Enrolling: It is possible that your mortgage company will permit you to consistently send in half and quarter payments without signing onto their program. Unfortunately if they do, you will need to specify with each manual payment that the money is to be applied to your principal loan amount.

How to Pay Off My Mortgage Faster Calculator

This calculator is so cool, that it should be dubbed the “how to pay off my mortgage faster calculator“. I mean, paying off your mortgage a few years early can literally change your life.

Run your own numbers to see what adding just one extra mortgage payment per year can do to the amount of years you have to pay on your mortgage.

You'll need either your original loan amount OR your current balance, the date of the first loan payment you made, the loan length, and your interest rate.

So, what do you think? Is this an easy way to pay off mortgage faster, or what?

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Amanda L. Grossman is a Certified Financial Education Instructor, Plutus Foundation Grant Recipient, and founder of Frugal Confessions. Over the last 10 years, her money work helping people with how to save money and how to manage money has been featured in Kiplinger, Washington Post, U.S. News & World Report, Business Insider, LifeHacker, Woman's World, Woman's Day, ABC 13 Houston, Keybank, and more. Read more here.

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