How to Pay Off Your Mortgage Fast

Crippling student debt has deterred 60% of millennials from taking out mortgages. Although it's not completely impossible to buy a home while paying student loans, more of the current generation is committing to 30-year mortgages.

Here's how you can pay off your mortgage and escape the debt trap early, according to CFA Charterholder Francisco Faraco.

Switch to a Shorter Fixed-Rate Mortgage

The advantages of a 15-year mortgage outweigh its cons. The interest rate of a 30-year plan might be on par with a 15-year plan, but you'll only have to pay it half as long as in the latter. The only downside is a higher monthly payment. 

If you can lower your living expenses and see a pay rise in the future, you might manage a 15-year plan with your student loan payments, which are unlikely to outlast your mortgage anyway.

If you already have a 15-year mortgage, try paying it off in 10 years.

Make Biweekly Payments

Biweekly payments are a common tactic to make one extra payment annually. It's when you pay half your mortgage every two weeks instead of making the full monthly payment. You'll have made 13 mortgage payments by the year's end instead of the required 12.

While this would only bring down your payment period to 27 years, you can combine it with lump sum payments and refinancing to pay off your loan sooner rather than later.

Make Extra Principal Payments

If you can't manage a lump sum to reduce your mortgage term, you can put any leftover savings towards the principal at the end of every month. This would reduce your loan term and the interest payments you must make over the years.

Many people streamline extra principal payments by dividing the principal by 12 and paying it in fractions every month. Some also round off payments in the short term to pay the principal faster. For instance, if your monthly payment is $1,013, you can pay the whole $1,100 instead.

Explore Strategies with CFA Charterholder Francisco Faraco

While the above strategies can help you pay your mortgage faster, they might have terms and conditions. For instance, your extra principal payments won't qualify unless you label them as such.

Avoid these mistakes and navigate early mortgage payments through the expert guidance of the New York-based CFA designated teaching assistance at the University of Chicago, Francisco Faraco. Reach out to the CFA charterholder to be debt-free early.

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