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How to Save Money While Paying Mortgage

Your mortgage is probably your biggest personal finance obligation. We present to you 25 tips to save money while paying down the mortgage for your dream home. Read on to discover practical ways to lift that financial burden off your shoulders!
How to Save Money While Paying Mortgage
Smaller consistent actions can lead to greater savings over your mortgage. It just takes commitment and intent. Thoughtful strategies, along with the motivation to gain debt freedom, will allow you to shorten the path toward building wealth from home equity and paying off your mortgage ahead of schedule.
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Buying a home poses one of the biggest financial commitments to most individuals. Your mortgage payments comprise the largest component of your monthly bills. Just because you’ve taken on a large mortgage doesn’t mean you’re doomed to live from paycheck to paycheck. Furnishing and rebuilding a new house gives freedom and independence. This can be topped with some smart moves and disciplined money management to keep your house costs down.

How you can save money while paying mortgage? We tackle this question for you.

Struggling with consolidating debt, making major purchases, or meeting unexpected costs? Beem’s personal loan feature can help you zero in on the kind of loan that suits your requirements best and helps you sail through a financial crunch.

Best 25 Ways to Save Money While Paying Mortgage

Approaching your mortgage as an opportunity to build equity in your home, and not merely with the thought of repaying it.

That includes learning to save interest, fees, and related costs that would free more money to let you pay your principal down faster, or to invest elsewhere. Without further ado, let’s dive into 25 genius tips that could save you a fortune while paying off your mortgage. Cause who doesn’t want to be free of debt?

Refinance Your Mortgage

If the interest rates have fallen since you got a mortgage, this can save you thousands over the loan tenure. Crunch the numbers to see if the upfront costs of refinancing are justifiable.

Instead of giving it in a single monthly payment, make an automatic bi-weekly payment. Essentially, you will pay one extra monthly payment every year, helping you pay down the principal faster without taking a hit to your finances.

Round Up Payments

Another trick in the same alley is rounding up your mortgage payment to the next $100 or $50. That little extra money will be directly used against your principal balance, interest-free.

Put Windfalls Toward Your Mortgage

Put some or all of your lump sum receipts, such as tax refunds, bonuses, or other windfalls, toward your mortgage principal. This will help you repay your mortgage and not make a dent on your monthly budget.

Drop PMI as Soon as You Can

Private mortgage insurance (PMI) can be added to your mortgage payment each month. If you build to 20% home equity, make sure to give your lender a call to cancel your PMI policy and make that added expense go away.

Review Your Escrow Account

In addition, your lender could be over-collecting for property taxes and home insurance from your escrow account. Do an annual review, and if necessary, get your lender to refund any excess funds collected.

Consider a Home Warranty

For an annual fee, usually less than $500, a home warranty pays to repair or replace home systems and appliances during damage, offering financial protection from unexpected big outlays.

Do-It-Yourself Home Maintenance and Improvements

Most of the time, you can get home repairs done yourself, saving on costs for professional help. This can include landscaping and renovation projects.

Energy Efficiency Improvements

New insulation and appliances, along with new windows, may require up-front investments but lower monthly utility bills and increase the home value with time.

Shop Around for Home Insurance

Don’t renew your home and mortgage insurance every year without shopping around for better rates, as the prices vary.

Stick to a Budget

Take into account your mortgage payment, housing expenses, and financial goals. Refer to it regularly to stay on target.

Avoid Taking on More Debt

While a fancy new car or shiny remodeled kitchen might be tempting, adding to your debt can work against you while repaying your mortgage. Postpone large-scale purchases until you have greater built-up equity.

Plan for Property Tax Increases

Research your area’s patterns, then set aside funds that are likely to cover any increased property taxes down the road. Adjusting for this helps avoid sticker shock.

Use Online Tools to Monitor Mortgage Options

Websites like Bankrate can help track current interest rates and can even provide a special calculator that you will use to identify savings on interest for refinancing and other similar actions.

Consider Making One Extra Payment Per Year

If possible, make one additional mortgage payment within the year using tax returns, bonuses, or other spare cash. This can shave years off your loan term.

Cut Unnecessary Expenses

Also, every month, take time to go through your spending and identify what luxuries or indulgences in subscriptions you can cut from your budget, and directly reinvest those savings into your mortgage payment.

Rent Out a Room

Got extra room space at home? Why not rent your room out on Airbnb and get some monthly recurring income that will pay for your mortgage?

Invest in a Side Business

You can come up with a small side business that you could run with a small investment and spend the proceeds on extra mortgage repayments without affecting the main cash flow.

Automate Savings

Set up automatic transfers on pay days to funnel money directly into a dedicated mortgage savings account before you can spend it. You can thus not dip into those funds.

Negotiate Bills

From cable to gym memberships, call up providers and negotiate for better rates. Use competitor pricing to leverage your way into discounts.

Consolidate Debt

Conversely, if you have a few outstanding balances on a credit card or other debt, consolidate them into a lower-interest loan. This avoids the total interest accrued so that you’re able to put more towards your mortgage.

Stay Informed About Tax Deductions

Interest on mortgage and property tax may be deducted from the taxable income. Ensure to fill up all eligible deductions properly for maximum returns, creating more room for mortgage payment funds.

Maintain a Good Credit Score

A high credit score can also qualify you for the very best mortgage rates if you refinance and ensure that any future major loans have lower interest costs.

Use Cashback and Rewards Programs

Utilize the rewards programs offered by your credit cards, including travel and shopping, and convert the redeemable rewards into making mortgage payments.

Reassess Your Financial Goals Regularly

Circumstances change with time, and priorities change. Re-validation of your mortgage and other financial goals would assist in ensuring the strategies and budgeting are in line with the same.

Conclusion

Your mortgage is probably your biggest personal finance obligation—think of all those dozens of strategies as a way not to be left “house poor”.

Take one or more of the above tips, such as refinancing for lower rates, making bi-weekly payments, shopping around for better pricing of your insurance, and ramping up your disciplined saving habits. 

Smaller consistent actions can lead to greater savings over your mortgage. It just takes commitment and intent.

Thoughtful strategies, along with the motivation to gain debt freedom, will allow you to shorten the path toward building wealth from home equity and paying off your mortgage ahead of schedule.

You may have to make a few short-term sacrifices, but picture in your mind how free you will be when that financial burden gets lifted off your shoulders. The long-term benefits of being mortgage-free will far outweigh any short-term struggle.

And if you’re looking to make some extra cash, try Everdraft on Beem. It helps you get that additional income by making on-time payments, avoiding overdrafts, payment failures and more.

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Author

Picture of Johnathan James

Johnathan James

With over 11 years of experience, Johnathan started his writing career as a copywriter. Coming from a finance and management background, he excels in covering financial topics. When he's not spurning out fintech content, you will find him playing football, basketball and racing.

Editor

This page is purely informational. Beem does not provide financial, legal or accounting advice. This article has been prepared for informational purposes only. It is not intended to provide financial, legal or accounting advice and should not be relied on for the same. Please consult your own financial, legal and accounting advisors before engaging in any transactions.

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