How to Pay Off Your Mortgage Faster: 4 Proven Strategies
Accelerating your mortgage repayment is one of the most effective ways to reduce total interest costs and achieve financial freedom sooner. In Singapore's current interest rate environment, homeowners have multiple strategic options to shorten their loan tenure and build equity faster. This guide walks you through four proven methods to pay off your mortgage faster, and shows you how Homejourney makes the process simpler and more transparent.
Strategy 1: Make Extra Mortgage Payments
The most straightforward way to accelerate mortgage repayment is making additional payments toward your principal balance. Even small extra payments compound significantly over time, reducing both your loan tenure and total interest paid.
Lump-Sum Payments: When you receive unexpected windfalls—such as work bonuses, tax refunds, or inheritances—directing these funds toward your mortgage principal can dramatically reduce your outstanding balance. For example, a single $10,000 lump-sum payment can reduce your loan tenure by several months while saving thousands in interest charges. Many Singapore banks allow penalty-free lump-sum payments outside the lock-in period, though some may charge fees during the lock-in phase. The key is timing: plan these payments strategically to maximize savings.
A practical tip: round up your mortgage payment to the nearest thousand. If your outstanding balance is $194,620, paying $195,000 instead creates a small buffer that reduces your principal faster over the long term.
Increased Monthly Contributions: Alternatively, commit to paying an extra amount each month toward principal repayment. This disciplined approach works particularly well for salaried professionals with stable income. Even an additional $200-500 monthly can shorten your loan tenure by 2-3 years and save over $30,000 in interest costs over the life of your loan.
Many homeowners find success with annual additional payments—allocating a year-end bonus or 13th-month salary entirely to mortgage principal. This approach maintains monthly cash flow flexibility while still accelerating repayment meaningfully.
Strategy 2: Refinance to a Shorter Loan Tenure
Refinancing your mortgage to a shorter loan term is one of the most powerful accelerators available to Singapore homeowners. With current fixed rates as low as 1.30-1.6%, this is an optimal time to refinance if you're locked into higher rates from previous years.
When you refinance to a shorter tenure—say, from 30 years to 20 years—you dramatically increase the pace of principal repayment. Shorter tenures typically come with lower interest rates, creating a double benefit: lower monthly interest charges and faster equity build-up. For instance, transitioning from a 30-year to a 20-year mortgage means claiming full homeownership a full decade earlier while positioning yourself for greater financial independence at a younger age.
The trade-off is higher monthly repayments. However, this increased commitment directly aligns with your goal of owning your property outright faster. Before refinancing, evaluate whether your current financial situation can comfortably support the higher monthly payment without compromising other financial priorities.
Timing Your Refinance: The ideal timing for refinancing is three months before your lock-in period ends. This allows you to secure a new rate before any penalties apply. In 2025-2026, many homeowners saved significantly by refinancing—one DBS customer moved from a 3% rate to 1.6%, saving approximately $500 monthly on a typical mortgage.
Use Homejourney's bank rates comparison tool to instantly compare refinancing offers from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, and other major banks. Our multi-bank application system means you submit once and receive offers from all lenders simultaneously—eliminating the need to approach each bank individually.
Strategy 3: Cut Expenses and Redirect Savings to Mortgage
A strategic dual approach—cutting non-essential expenses while increasing income—creates substantial additional funds for mortgage acceleration. Begin by conducting a thorough budget review to identify discretionary spending: dining out, subscriptions, entertainment, and lifestyle expenses. Redirecting even $300-500 monthly toward mortgage principal can reduce your loan tenure by 18-24 months.
This strategy pairs well with income-boosting initiatives. Whether through career advancement, freelance work, or passive income streams, every additional dollar earned can be allocated directly to principal repayment. The psychological benefit is significant too—seeing your mortgage balance decrease faster creates momentum and reinforces your commitment to financial freedom.
In Singapore's context, this might mean optimizing your CPF strategy alongside mortgage payments. Some homeowners with idle cash in savings accounts earning below 1% can refund CPF contributions, restore their balance to earn the guaranteed 2.5% interest, while simultaneously reducing a mortgage that costs more. This creates a risk-free arbitrage of nearly 1% annually.
Strategy 4: Optimize Your Loan Structure with Interest-Offset Accounts
An often-overlooked tool in Singapore's mortgage landscape is the interest-offset account, offered by select offshore banks operating in Singapore. This account reduces the portion of your loan on which interest is charged. If you have a $500,000 mortgage and park $100,000 in an offset account, you effectively pay interest only on $400,000.
For homeowners with substantial liquid savings, this strategy can significantly reduce interest costs without requiring actual additional payments. The offset account maintains your liquidity—you can access the funds if needed—while simultaneously reducing your effective loan balance. This works particularly well when combined with other strategies like bonus-month salary allocation or windfall management.
Why Refinancing Decisions Matter in 2026
Singapore's mortgage market has shifted dramatically. After years of elevated rates, the current environment features fixed-rate loans starting from 1.30% and floating rates from 1M SORA+0.25% (approximately 1.42%). This represents a significant opportunity for homeowners to refinance and accelerate repayment.
At OCBC, the number of homeowners making the switch grew seven times in the first 11 months of 2025. A homeowner with a $500,000 loan could save up to $4,100 in annual interest by switching to a five-year fixed rate package. These savings compound dramatically when applied to mortgage acceleration strategies.
The chart below shows recent SORA trends to help you understand how rates have moved:
When evaluating refinancing options, consider both fixed and floating rates based on your risk appetite and financial plans. Four in five Singapore customers opt for fixed packages, valuing the certainty of stable monthly repayments. However, if you believe rates will continue declining through 2026, a floating rate might offer better value.
How Homejourney Simplifies Mortgage Acceleration
Implementing these strategies requires comparing offers across multiple banks and understanding your eligibility. Homejourney eliminates the complexity through several integrated features:
- Bank Rates Comparison: View current rates from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB, Public Bank, Hong Leong Bank, and Citibank in one dashboard. No need to visit each bank's website separately.
- Mortgage Eligibility Calculator: Calculate your borrowing power instantly using your income, CPF balance, and existing debt obligations. Understand your maximum loan amount before applying.
- Multi-Bank Application: Submit a single application through Homejourney and have your details sent to all major banks simultaneously. Receive competing offers and compare side-by-side.
- Singpass Integration: Use your Singpass to auto-fill employment, income, and CPF data in seconds. Your application is faster and more accurate.
- Real-Time SORA Tracking: Monitor live 3M and 6M SORA rates to time your refinancing decision perfectly.
- Mortgage Broker Support: Connect with Homejourney's mortgage brokers who provide personalized guidance on which strategy best suits your situation.
Visit Homejourney's bank rates page to compare current offers, calculate your eligibility, and apply via Singpass. Our platform prioritizes your safety and trust by verifying all information and ensuring transparent rate comparisons.
Key Considerations Before Accelerating Repayment
While accelerating mortgage repayment is financially prudent, maintain balance in your overall financial strategy. Mortgage interest rates in Singapore are historically favorable—often lower than returns from other investments or the opportunity cost of higher-interest debt.
Before committing substantial funds to mortgage acceleration, consider:
- Settling higher-interest debts (credit cards, personal loans) first
- Maintaining an emergency fund covering 3-6 months of expenses
- Evaluating investment opportunities that might yield better returns
- Assessing your risk appetite and long-term financial goals
- Consulting with financial professionals about your specific circumstances
For refinancing specifically, be mindful of associated costs. Legal fees, valuation fees, and administrative charges can range from $1,500-3,000. These costs are typically recovered within 12-18 months through interest savings, but calculate the break-even point for your specific situation.
Frequently Asked Questions
Can I make extra mortgage payments without penalty?
Most Singapore banks allow penalty-free lump-sum payments outside the lock-in period. However, some banks charge fees for lump-sum payments during the lock-in period (typically 2-5 years). Check your mortgage agreement or contact your bank to confirm. When refinancing, ensure the new package includes penalty-free partial repayment options.
How much can I save by refinancing to a shorter tenure?
Savings depend on your current rate, new rate, and tenure reduction. For example, refinancing a $500,000 mortgage from 30 years at 3% to 20 years at 1.6% could save over $150,000 in total interest while shortening your loan by 10 years. Use Homejourney's mortgage calculator to estimate your specific savings.
Should I choose fixed or floating rates for acceleration?
Fixed rates offer certainty and predictability—valuable if you're planning specific additional payments. Floating rates may offer lower initial costs if you believe rates will continue declining. Most Singaporeans prefer fixed rates for budgeting stability. Evaluate your risk appetite and long-term financial plans before deciding.
When is the best time to refinance?
The ideal timing is three months before your lock-in period ends. This allows you to secure a new rate before penalties apply. In 2026, with rates at multi-year lows, refinancing is particularly attractive for homeowners locked into rates above 2%.
How does CPF fit into mortgage acceleration?
CPF can be used to pay down your mortgage, and some homeowners strategically refund CPF contributions to earn the 2.5% guaranteed return while reducing higher-cost mortgages. This creates a risk-free arbitrage opportunity. Explore CPF optimization strategies to understand how this fits your situation.
Take Action Today with Homejourney
Accelerating your mortgage repayment is achievable through multiple strategies—from extra payments to refinancing to strategic expense management. The right approach depends on your financial situation, risk appetite, and long-term goals.
Homejourney makes implementation simple by providing transparent rate comparisons, eligibility calculations, and multi-bank applications in one trusted platform. Our commitment to user safety means all information is verified and rates are current as of January 2026.
Start your mortgage acceleration journey today: Compare bank rates, calculate your eligibility, and apply via Singpass on Homejourney. Our mortgage brokers are ready to guide you toward the strategy that works best for your situation.
For comprehensive coverage of mortgage acceleration strategies, see our main guide: How to Pay Off Your Mortgage Faster: Homejourney Singapore Guide.
