One simple mortgage tip that could save you thousands
CONTRA COSTA COUNTY, CA (June 26, 2025) — If you’re a homeowner, you probably have a lot on your plate and your mortgage might just feel like another monthly bill to check off the list. But there’s a surprisingly easy strategy that can dramatically reduce how much you pay over time – and even help you pay off your loan years earlier.
It doesn’t involve refinancing, rate shopping or major lifestyle changes. It’s as simple as making one extra mortgage payment per year.
Let’s look at an example that many homeowners in our area can relate to:
Say you have a $700,000 mortgage with a 7% interest rate on a 30-year fixed loan. Your monthly principal and interest payment would be about $4,657.
If you make the standard 12 payments each year, you’ll stay on track to pay off your mortgage in 30 years – after paying over $976,000 in interest alone over that time.
But if you simply make one extra payment of $4,657 each year, you could:
- Pay off your mortgage 4–5 years earlier
- Save over $200,000 in interest
That’s a huge win for such a small change – and it doesn’t require large upfront costs or big changes to your monthly lifestyle.
So how can you make this strategy work for you?
Here are three simple methods homeowners use:
- Divide and conquer: Take your monthly mortgage payment and divide it by 12. In this case, $4,657 ÷ 12 is about $388. By adding $388 to each monthly payment, you’ll effectively make one extra payment each year – without feeling the impact all at once.
- Switch to bi-weekly payments: Instead of one monthly payment, pay half your mortgage every two weeks. This results in 26 half-payments – or 13 full payments – each year. Many lenders will allow you to set this up automatically. But usually for a small fee.
- Use a lump sum: Set aside a chunk of your tax refund, work bonus or annual raise and make one extra mortgage payment each year when it’s convenient.
This approach works best when you start early in your mortgage term, but it’s never too late to start. And if you’re also thinking about refinancing or considering a move, this can pair well with other strategies to build equity faster and reduce your financial stress.
Want to know how much you could save based on your specific loan? A local mortgage expert can show you your personalized numbers and help you decide the best path forward for your situation.
Sometimes the smartest financial decisions are the simplest ones.
One extra mortgage payment a year might not sound like much, but it could be the single best investment you make in your future home equity.
If you’re ready to see what this could mean for you, I’m always here to help.
Anna Kussmaul is a mortgage broker handling multiple loan types. Email her at Anna@StoneCastleMortgage.com.