The day you signed your mortgage papers and received the keys to your new home was undoubtedly one of the most thrilling moments of your life. But as the weeks and months pass, the weight of those seemingly never-ending mortgage payments begins to sink in. A 25 to 30-year commitment looms large, and it’s easy to feel overwhelmed.

Naturally, you start to wonder: Can I pay off my mortgage faster?  You’ve searched the internet, watched countless YouTube videos, and explored every social media avenue. But here’s the good news—you don’t need complex calculations or spreadsheet magic. I’ve found a straightforward strategy that can accelerate your journey to homeownership. Let’s dive into this game-changing method.

What Is the 1/6 Mortgage Payoff Strategy?

The 1/6 strategy is a simple, easy-to-understand, yet effective approach to accelerating your mortgage payoff:

1. Take your regular monthly mortgage payment
2. Divide it by 6
3. Pay this extra amount every month in addition to your regular payment

This method is gaining popularity among homeowners eager to build equity faster and reduce their total interest payments.

How effective Is the 1/6 Strategy?

People love to talk about financial “hacks,” that claim to cut your mortgage term in half. Sounds amazing, right? Well, the truth isn’t as dramatic, but I have to admit, the results are still pretty good.

Base Scenario: $300,000 Mortgage for 30 years (360 months)

We’ll calculate monthly compounding (US standard) and semi-annual compounding (Canadian standard).

Monthly Payments (Standard)

US Standard (Monthly Compounding)

Canadian Standard (Semi-annual Compounding)

Accelerated Bi-weekly Payments

For accelerated bi-weekly payments, we divide the monthly payment by 2 and pay it every two weeks, resulting in 26 payments per year (equivalent to 13 monthly payments).

US Standard (Monthly Compounding)

Canadian Standard (Semi-annual Compounding)

Accelerated Weekly Payments

For accelerated weekly payments, we divide the monthly payment by 4 and pay it every week, resulting in 52 payments per year (equivalent to 13 monthly payments).

US Standard (Monthly Compounding)

Canadian Standard (Semi-annual Compounding)

Key Observations:

• The differences between US and Canadian standards (monthly vs. semi-annual compounding) are small but noticeable. The Canadian method results in slightly lower payments and interest.
• Accelerated payments (bi-weekly and weekly) significantly reduce the amortization period and total interest paid, even without the 1/6 strategy.
• The 1/6 strategy remains effective across all payment frequencies, reducing the amortization period and total interest paid.
• Higher interest rates still result in:
  • Larger payments
  • More interest saved with the 1/6 strategy
  • Slightly faster payoff times when using the 1/6 strategy
• The combination of accelerated payment schedules and the 1/6 strategy offers the fastest payoff times and the highest interest savings.
• The differences between weekly and bi-weekly payments are minimal, so the choice often depends on personal preference and cash flow management.

Why the 1/6 Mortgage Payoff Strategy Works

• Power of extra payments: Every extra dollar goes directly to your principal balance, reducing the interest you pay over time. Unlike regular payments, which are partially swallowed by interest, these additional payments go straight to building equity.
• Compound interest in reverse: Extra payments early in your mortgage act like compound interest in reverse. The more you pay upfront, the more you save in interest over the life of the loan.
• Manageable increase: A 1/6 increase to your payment feels achievable for many homeowners. It’s a small but consistent bump that adds up significantly over time without overwhelming your budget.

Nuances of the 1/6  Mortgage Payoff Strategy

While the 1/6 strategy is effective, there are a few factors to consider before diving in:

• Interest Rates Matter: If your mortgage has a higher interest rate, you’ll see greater savings. On the flip side, if you locked in a historically low rate, the benefits may be less substantial.
• Early vs. Late Mortgage Years: The earlier you start, the more savings you’ll enjoy. But even if you’re halfway through your mortgage, applying this strategy can still make a meaningful difference.
• Flexibility: Life happens. If you can’t make the extra payment every month, that’s okay. This strategy isn’t rigid—if you skip a month or two, pick it back up when you can.
• Check for Fees: Some lenders may charge penalties for early payments, so be sure to confirm that any extra payments are applied directly to the principal without fees.

How to Implement the 1/6 Mortgage Payoff Strategy

• Calculate your extra payment: Use our formula or an online calculator.
• Contact your lender: Ensure extra payments are applied to the principal.
• Automate payments: Set up automatic transfers for consistency.
• Track your progress: Monitor your loan balance to stay motivated.
• Reassess regularly: Evaluate the strategy’s effectiveness annually and adjust as needed.

Alternative Rapid Payoff Methods

While the 1/6 strategy is powerful, there are other ways to speed up your mortgage payoff:

• Bi-weekly Payments: Make half of your monthly payment every two weeks, resulting in 26 payments per year (the equivalent of 13 monthly payments).
• Annual Lump Sum Payments: If you receive a yearly bonus or tax refund, consider applying it to your mortgage.
• Refinancing to a Shorter Term: Lowering your mortgage term to 15 or 20 years can dramatically reduce your interest, but your monthly payments will increase.

Is the 1/6 Mortgage Payoff Strategy Right for you?

The 1/6 strategy offers a balanced, manageable approach to paying off your mortgage faster. While it may not cut your mortgage in half, the potential to save tens of thousands of dollars in interest and shave nearly a decade off your loan term is significant.

Remember, mortgage strategies aren’t one-size-fits-all. What works for one homeowner might not be right for another. If you’re ready to take control of your mortgage, start small, stay consistent, and watch your home equity grow faster than you ever imagined.

Ready to accelerate your mortgage payoff? Calculate your extra 1/6 payment today and contact your lender to get started. As always, consult with a financial advisor to ensure this strategy fits your overall financial goals.