This Trick Could Save the Average Homeowner $69,228

Homeowners may be surprised at the savings that can result.

A mortgage is the most expensive kind of debt most people take on over the course of their lives. In fact, many people borrow hundreds of thousands of dollars when buying a home and they take decades to pay off that debt.

But there's a simple and easy way to make paying off a loan cheaper and quicker. Trying this trick could come with substantial savings without making changes to your lifestyle.

Here's how you can lower the cost of your mortgage loan

If you want to reduce the cost of borrowing, one of the simplest and most effective ways to do this is to change the way you pay your mortgage.

Most people pay their loans once per month. But, you could instead opt to divide your monthly payment in two and pay it biweekly. This approach could make a lot of sense since most people get paid biweekly. You could make half of your mortgage payment out of each paycheck.

Now, you may be wondering why this would help you. The reason is simple: If you pay biweekly, there are typically two months in the year when there are five weeks and you end up getting an "extra" paycheck if you receive your salary every other week.

That means if you're paying half of your mortgage payment out of each paycheck, you will end up making one full extra payment during the year -- likely without even noticing you're doing so. This extra payment could reduce your balance since it can go entirely toward paying down what you owe. And it can make a big difference.

Say, for example, you purchased a median-price home, which would mean buying a $416,000 house if you bought in June 2022. If you put down 20% and borrowed the remaining 80%, you'd be taking out a $333,600 mortgage. If your interest rate was 5.5% and you had 30 years remaining on your loan, you would end up saving a whopping $69,227.82 by paying biweekly. You would also pay off your loan around 5.1 years ahead of schedule.

Should you try this technique?

As you can see, making a biweekly mortgage payment instead of just paying your loan as scheduled can make a huge difference. You will be debt free sooner and save a lot of money. And you can do that without making big lifestyle changes if you get used to just paying half your loan out of each check.

There are downsides, though. Not every mortgage lender allows biweekly payments. There are third-party services that would facilitate this type of payment arrangement for you but they usually charge for it. You can get around this, though, by making your biweekly mortgage payments into a separate bank account and just sending one monthly payment to your lender each month along with making an extra principal payment when the "extra" money goes into the account.

You'll also be using money toward early mortgage payoff that could have been used for other things, such as potentially investing in assets that provide a better return than you get by saving on mortgage interest.

But if you aren't going to make sure to invest the money you'd be putting toward your biweekly payments, then you'd probably be better off just using the cash to pay down your mortgage since this is an effortless way to retire your debt much earlier.