How To Pay Off A 30-Year Mortgage In 7 Years (Without Being Rich)

In this video, I'm going to show you how you can pay off your 30-year mortgage in the next seven years even if you don't get an inheritance or win the lottery. And yes, it is possible. This couple got famous by paying off their mortgage in less than four years by getting serious about paying off their house. And they're not alone. There are countless stories of regular people who did not make huge money but were able to pay off their mortgage fast when they followed a system. Now, just to run the same page, this isn't going to be easy. It will take hard work and it will take sacrifice. But there are some simple tricks that you can use to pay off your mortgage a whole lot faster without feeling the pain of not spending any money. So if you're serious about paying off your mortgage early, stick with me until the end of this video. Here's what happens when you buy a house and you do what everybody says is right. You want to buy this $437,000 house and you're going to put down 20%, which means you're only going to finance $350,000 and you get a 30-year fixed rate mortgage at 7% a year in interest. Well, how much is this actually going to cost you over the course of 30 years? The first thing you're going to pay is the cost of the house, which is $437,000. And then you're going to pay interest over those 30 years. And if you pay it off the way that the bank tells you over this 30-year period, you're going to end up paying an additional $488,000 in interest, which means yes, you're going to pay over $900,000 in order to purchase this house. But that's not all. It gets a little bit worse. Your monthly mortgage payment is $2,329 a month. And most people think here that when I go and buy this house, half of this is going to go in interest to the bank and the other half is going to be equity, meaning helping to actually pay off the house. But that's not how it works. Your bank wants to get paid before you get paid. So what they do is they front load your mortgages, which means in the beginning part of your mortgage, the majority of your mortgage payment is going directly into your banker's pocket with interest. Take a look. This is the amortization schedule on your $350,000 mortgage. And what you'll see is in year one, you're going to pay over $24,000 in interest, while only $3,500 goes to actual principal, meaning building equity in your house, which means 87% of every dollar that you pay is going directly into your banker's pocket with interest. And it stays like this until all the way to year 21. In year 21, more than two decades later, that's when more than half of your monthly payment is going to actually build you equity to make you wealthy instead of your banker. This is why it's not just so important, but also so powerful to pay extra money into your mortgage, especially early on, because every additional dollar that you pay is going directly to building equity in your house, which means that's a dollar of interest you're no longer going to have to pay. And that can save you a lot of money over the course of your 30-year mortgage. And this is where a lot of people say, well, Jaspreet, I don't have any extra money to pay towards my mortgage. And there are some little tricks that you can use to help you pay down your mortgage faster without actually feeling the pain. So let's go through these. And I want to remind you that for those of you that are investors or you want to stay up to date on what's happening in the financial markets, my team publishes a free daily newsletter every morning called Market Briefs, where we break down what's happening in things like the economy, housing, stocks, crypto, and global markets into a fun, witty, and easy to read newsletter. You can read it in less than five minutes every morning, and it's completely free. There are hundreds of thousands of investors that read Market Briefs every morning. And when you sign up for Market Briefs, we're also going to give you access to a free investing masterclass to level up your knowledge as an investor. So if you want to get Market Briefs and my investing masterclass all for free, all you have to do is sign up and click the link down in the description below. There are three things that you can do to help you pay off your mortgage a whole lot faster. Number three is probably one of the most powerful that most people have not even heard of. But let me start with number one, which is pay off your mortgage every two weeks instead of every month. And I'll show you what to do. The first way that you can do this is you take a monthly mortgage payment, $2,329, and you divide it by two, which is $1,164.50. Now, instead of paying this amount every month, you're going to pay this amount every two weeks. And now when you pay this amount every two weeks instead of once a month, now you're going to pay off your mortgage five years sooner and you're going to save more than $90,000 in interest just by paying it every two weeks instead of once a month. Now, at this point, you might be wondering, well, how does that math work? How am I going to save $90,000 just by paying every two weeks instead of every month? And the reason why is because there are 52 weeks a year, which means you're going to make 26 of these payments. And if you make 26 half payments, that's 13 full payments, which means effectively over the year, you're not making 12 mortgage payments. You're making 13 mortgage payments. And now if you say, well, Jaspreet, I don't know how to make a mortgage payment every two weeks. My bank doesn't allow me to do that. The alternative way to do this is you take this amount right here, $2,329, and then you divide this number by 12, which is $194.09. And then what you do is you take $2,329, and then you add in $194.09. And what that tells you now is $2,523.09. What this number is, is if you pay this amount every month instead of this regular mortgage payment, if you do this, you will effectively make 13 mortgage payments a year instead of 12. And if you make 13 mortgage payments a year instead of 12, now you're going to pay off your mortgage five years sooner, and you're going to save more than $90,000 in interest. But the key here is every time you make this additional dollar, this additional payment towards your mortgage, you don't want this payment to apply to the next payment. You want this payment to be applied to your principal balance. Because if you just apply this extra money towards the next payment, you're not actually building equity in the house. You're just trying to prepay your next payment. But what you want to do is you want to build equity in the house. That way, the amount of interest that you have to pay goes down. Because as you build more equity in the house, there's less debt that you have to pay interest on. And that's what you want. You ultimately want to owe the bank less money. And if you owe the bank less money, there's less money that they can charge interest on, which is why you want to pay every additional dollar directly to the principal balance. So the first way, and the minimum way to pay off your mortgage sooner, is to pay 13 mortgage payments a year instead of 12. And the way that you can do this is just tack on a little bit more to your monthly mortgage payment. Make sure the extra money goes to the principal balance, not to your next mortgage payment. Or you can take your monthly mortgage payment, divide it in half, and then pay that amount every two weeks instead of every month. Option number two for the people that actually want to pay off their mortgage in four, five, six, seven years, is now you have to get extremely aggressive with getting extra money and paying off your mortgage faster. I'm going to give you some numbers here in just a minute, but the whole idea here is if you have a mortgage, the way that you pay it off is to get extra money and pay it off faster. And so when you get a tax refund, you get a bonus, you get a raise, instead of going out and spending that money, take all this extra money and use it directly to pay off the mortgage. Because every additional dollar that you pay is a dollar that you don't have to pay interest on, and it's a dollar of interest that you don't have to pay, which not only saves you time, but it also saves you money. That way you can be financially free and without a mortgage sooner rather than later. If you can find an additional $200 a month, it is going to save you six years on your mortgage, and you're going to save about $108,000 in interest. If you can find an extra $500 a month, that's about an extra $16-ish a day. Well, now that's going to save you 12 years on your mortgage, and it's going to save you about $200,000 in interest. And if you get really aggressive, you work to find some more income, you start a side hustle, you work on a side business, you get a second job, you're working to make some extra money, and you take all that extra money to pay off this mortgage faster. If you can find an extra $2,500 a month, I know it's a lot, but if you can do it, that's going to save you 23 years on your mortgage. That's going to save you $375,000 in interest that you will not have to pay later on in your life. Now, the idea is you don't have to save thousands of dollars. Even a little bit of extra dollars every single day can add up to big savings, hundreds of thousands of dollars that you will not have to pay that you get to keep in your pocket that you can use to travel, that you can use to fund your retirement, that you can use to buy a new car, but it requires you to be disciplined to find that extra money today. And this is where option number three can be even more valuable. Option number three is a concept called mortgage recasting. And the idea here is, let's say that you can make a big lump sum payment towards your mortgage. You get a bonus, you get a big tax break, you get an inheritance, you get some extra money, $5,000, $10,000, $15,000, $20,000. And then you take this extra big lump sum of money, and you pay that directly towards your mortgage. Well, what happens is you're still paying the same interest that you were before, because if you pay down your mortgage from $350,000 to $330,000, your mortgage payment doesn't change. But what if now, instead of having a $350,000 mortgage, now you have a $330,000 mortgage? Well, your monthly mortgage payment should be smaller. And if your monthly mortgage payment is smaller, but you keep paying the same amount, well, that means effectively you're paying more money towards the principal balance to pay off your mortgage faster, even though you're not paying any extra money. Because you've paid down the mortgage, you have some more balance in your house, you have some more equity in your house. And if you have equity in your house, you should be able to pay less mortgage payments to your bank, right? Well, the only way you can do that is if you do something called mortgage recasting. It's different than a mortgage refinance, because a mortgage refinance is a whole new loan. The way that that works is I bought this house, I had a $350,000 mortgage, now I paid down $50,000, I have $300,000 left on my mortgage. A mortgage refinance is I start a whole new mortgage at $300,000 or I can pull out money, whatever. But now that's a whole new mortgage. With mortgage recasting, the way that this works is you're going to have to make a lump sum payment. Usually it's a minimum of $5,000, sometimes a minimum of $10,000, but you're going to make a lump sum payment to your bank. And then once you make this lump sum payment to your mortgage, then the bank will then recast your mortgage and readjust what your mortgage payment should be. So if you go from $350,000 as your mortgage, and then you make a lump sum payment and now it's only $330,000, well, now your monthly mortgage payment would fall. Maybe it falls from $2329 a month to, let's just hypothetically, $2,200 a month. Well, why does that matter? Because if your payment is now $2,200 a month, but you're paying $2329 a month because you keep this payment that you wanted to pay, well, now you're effectively just added on an additional $129 a month directly to the principal balance without having to pay any additional money every single month. And we know that if you can pay a little bit of extra money every single month, it can add up to big savings over the course of your mortgage time. Now, there is a fee to do mortgage recasting, but it's a whole lot cheaper than it is to do a mortgage refinance. And most banks, at least the major ones, will allow you to do a mortgage recasting. Not all will. So check with your bank if it's something that they allow and see what the fees are because generally getting a refinance is in the thousands of dollars. But a mortgage recasting might just be a couple hundred dollars. Oh, and I should also mention that the benefit of mortgage recasting is you don't have to worry about mortgage rates going up because you keep the same loan. You keep the same rate, you keep the same term. The only thing that changes is your mortgage payment goes down, which means now that same mortgage payment that you were paying before is having a bigger bank for your wallet. So if you have a 30-year mortgage, the way that you can get out of this mortgage sooner is not to follow what the bank says, but to get a little bit more aggressive. Because if you just follow what the bank says, the first thing that you're going to do is you're going to make your bank rich. And it's not going to be decades until the majority of your mortgage payment is going to actually build equity or principal on your house. And that's why now we want to flip things up. And what you want to do is you want to be more aggressive, especially early on because every additional dollar that you pay is going to go directly to your principal or equity balance. And that means there's less money that you have to pay interest on. And there's a few things that you can do to help you jumpstart this process to pay off your mortgage sooner. Number one is to make 13 mortgage payments a year instead of 12. This is the baseline, the minimum that I want you to do. The way that you can do that is number one, you take a monthly mortgage payment, you divide it by two, and now you pay this amount every two weeks instead of paying this amount every single month. What that does is now you're effectively going to make 13 mortgage payments a year, and many people are not even going to feel the difference. If your bank doesn't allow you to do that, if it's too complicating, no worries. Now what you do is you take a monthly mortgage payment, you divide it by 12, and you take that number and you tack it onto this, which means now instead of paying $23.29 a month, you're going to pay $25.23 a month. Now you're going to effectively make 13 mortgage payments a year instead of 12, which means you're going to pay off your mortgage about five years sooner, and that's going to save you about $90,000 in interest over the course of your mortgage in this example. Then we talked about number two, getting more aggressive. The way that you pay your mortgage faster, if you really want to pay it off in seven years, is by being more aggressive, period. That means taking all the extra money that you earn from your bonuses, from your raise, from your tax rebate, from your inheritance, from whatever money you come across, you take that money and you aggressively pay it off towards your mortgage. Just make sure every additional dollar that you pay is going straight towards your equity and principal and not going to make your next mortgage payment. Now what you can see is every time you pay some additional money every single month, it's going to help you not only be mortgage free years sooner, but it can save you hundreds of thousands of dollars in interest, which you can use to fund your retirement, go on a vacation, or get yourself a nice new car. Then we talked about number three, which is mortgage recasting. The idea here is instead of trying to refinance your mortgage, you recast your mortgage. When you make a lump sum payment, usually there's a minimum of 5,000, sometimes the minimum of $10,000. Every bank is going to be different, but you're going to make a lump sum payment towards your mortgage. When you do that, you've got to talk to your bank about this beforehand. Don't just do this. Talk to your bank about doing a mortgage recast. The idea is you get to keep the same mortgage, you get to keep the same rate, you get to keep the same term, but now because you have lowered the amount of money that you borrowed, your mortgage payment will go down. As your mortgage payment goes down, you need to keep making the same amount of mortgage payments, which means now instead of paying 23.29 a month towards your mortgage, you might be paying only $2,200 a month to your mortgage. If you're paying 25.23 a month, that means there's an additional $129 a month going straight towards your principal, and you don't have to pay any additional dollars a month. The way that you can do that is through a mortgage recast. That's going to allow you to keep making the same monthly mortgage payment, but more of the mortgage payment is going directly to your pockets instead of your banker's pockets, which allows you to be debt-free years sooner and save thousands, tens of thousands, or even hundreds of thousands of dollars in interest. Again, if you want to stay up to date on what's happening in the markets, Market Briefs is a free resource that I have for you down in the description. If you got value out of this video, the best thank you is a referral. If you could, please share this video with a friend, family member, colleague, or fellow investor. That way, we can continue to spread this type of financial education. Thank you. The housing market is going through a shift right now, and it's not just because home prices are higher or mortgage rates are higher, but because Wall Street is in trouble and they might be forced to sell their houses. The nation's largest single-family landlord, Invitation Homes, is going to go from a net buyer of houses to a net seller of houses in 2026.