By Jessica Ward, September 24, 2024
How to Save Money on Your Mortgage: 5 Effective Strategies
It’s common knowledge that you’ll pay interest when borrowing money for a mortgage, but when it comes to home buying, many people don’t realize just how much that interest can add up. Say you’re approved for a $500,000 30-year mortgage at a 6% interest rate. If you make your monthly payments as required, you’ll end up paying close to $579,190 in interest alone over the life of the loan. That’s more than the loan principal itself! But don’t worry—there are ways to significantly reduce the total cost of your mortgage.
Whether you’re a first-time buyer or looking to save on an existing loan, here are five proven strategies to help you save money.
1. Drop PMI (Private Mortgage Insurance)
Private Mortgage Insurance (PMI) is required if your down payment is less than 20%. It can add hundreds to your monthly payment. The good news? You don’t have to pay PMI for the life of your loan.
Once you’ve built 20% equity in your home, you can request to have PMI removed. By dropping PMI, you could save thousands of dollars each year. Be sure to contact your lender once your home has appreciated or you’ve paid down enough of your mortgage to reach this equity threshold.
Pro Tip: Keep track of your home value and mortgage balance so you know exactly when to request the PMI removal.
2. Utilize a Mortgage Calculator
Before taking on a mortgage, it’s essential to understand how much you’ll actually be paying over the loan term. Mortgage calculators are valuable tools that help estimate monthly payments, total interest paid, and the effects of various loan terms.
By adjusting loan variables such as term length and interest rate, you can see how different payment strategies will impact your bottom line. This will also help you budget more effectively and identify cost-saving opportunities.
Pro Tip: Use the mortgage calculator to simulate making extra payments or changing the loan term from 30 years to 15 years. You’ll be surprised at how much you can save in interest!
3. Recast Your Loan
Loan recasting is a lesser-known strategy that can save you thousands. After making a significant lump-sum payment toward your mortgage principal, you can request your lender to “recast” or recalculate your loan based on the new balance. This reduces your monthly payment without changing the loan term or interest rate.
The best part? Recasting typically involves a low fee compared to refinancing, and it’s a great way to lower your payments while keeping your existing loan terms.
Pro Tip: Check with your lender to ensure they offer recasting as an option before making a large principal payment.
4. Refinance Your Mortgage
Refinancing can be one of the most impactful ways to save on your mortgage. When you refinance, you’re essentially replacing your existing loan with a new one—usually at a lower interest rate.
With interest rates often fluctuating, timing a refinance when rates are low can save you tens of thousands of dollars over the life of your loan. You can also choose to switch to a shorter loan term (e.g., from 30 years to 15 years) to save even more on interest, although this will increase your monthly payment.
Pro Tip: Watch market trends or consult with a mortgage advisor to see if refinancing makes sense for your financial situation.
5. Make Principal-Only Payments
One simple yet effective way to save on your mortgage is by making additional principal-only payments. By paying more than your required monthly payment and applying the extra amount directly to your principal, you reduce the loan balance faster, which in turn reduces the interest you’ll pay over time.
Even small amounts can make a significant difference. For instance, adding an extra $100 to your principal payment each month could shave years off your mortgage and save you thousands in interest.
Pro Tip: Make sure to specify with your lender that any extra payments go toward the principal balance.
Conclusion
Paying off a mortgage may seem overwhelming, but with these strategies for how to save money on your mortgage: dropping PMI, utilizing a mortgage calculator, recasting your loan, refinancing, and making principal-only payments—you can save a substantial amount of money. Remember, even small adjustments can lead to significant long-term savings. Take control of your mortgage today, and start working toward financial freedom.
Jessica Ward
Broker | ADU Specialist | OR & WA
She/Her
My life is fueled by a profound passion for serving others and making a positive impact on my community.
https://youtu.be/x1kSQm5UdQo?si=Wam5-ZRcj3VTRn_g I’m a Great NW native and— five years into this industry—a broker known for delivering results while making people feel genuinely taken care of. I grew up in Portland and Southwest Washington, and I know this market—its neighborhoods, culture, pricing nuances, and opportunities. That lived understanding informs every recommendation I make. I’m inclusive of all people, price points and committed to creating a space where clients feel safe, respected, and fully themselves. I’m a mother to my daughter, Wynter Katie, and a dog mom to a very cute Yorkshire terrier, which keeps me grounded in real life and real perspective.When I’m not working, you’ll find me hiking in the Gorge, wine tasting in the Willamette Valley, dining at local restaurants, hosting social gatherings, perusing an art gallery, flowing through hot yoga, drinking a good hazy IPA at a brewery, listening to an audiobook or podcast, attending a networking event, chaperoning my daughters field trips. boating on the river, or unwinding at local spas and bathhouses.
I stay deeply connected to my community through volunteering and board participation. I’m especially passionate about children’s needs—particularly those involved in the foster care system—climate impact and sustainability, justice and equity for people of color, and mental health advocacy.
My clients consistently rate their experience with me five stars, whether they are buying selling or simply attending one of the first time home buying classes I host for free to educate and empower the community. I’ve been called the “queen of resources and connections,” and I take that seriously. I’m known for navigating down payment assistance programs, grants, ADUs, seller financing, and non-traditional paths to ownership with ease and clarity. Think polished expertise with a side of “I got you.” Access is power. Education is leverage. And I believe everyone deserves both. I’m also a real estate investor who manages my own properties, including an ADU, so my guidance is grounded in lived experience. I understand long-term value, cash flow, development potential, and creative strategy—not just on paper, but in practice. As a black woman in real estate, I lead with excellence and purpose in an industry where representation is still very rare. I’m honored to be the first African American broker in Oregon state history to close a transaction with a Black-owned title and escrow company, but my greatest accomplishment is impact—helping clients secure stability, build wealth, and step confidently into ownership. I run a tight ship—transparent, strategic, and supportive—but don’t get it twisted, we’ll laugh too. I bring luxury-level service without the stiffness. Professional polish with real and genuine personality. To me, real estate isn’t just about property—it’s about security, freedom, and community. And when you work with me, you’re not just closing a deal… you’re building something bigger. Follow along: @Jessica_TheHomeGirlWhat Clients Are Saying:
Clients consistently share that working with me feels:
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Supportive and steady, even in high-pressure moments
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Clear and transparent, with no unanswered questions
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Strategic and informed, particularly during negotiations
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Personal, never transactional
First-time buyers say they felt educated and empowered. Sellers value my pricing insight and communication. Investors trust my numbers, perspective, and long-term thinking. Five stars—because the experience is intentional!
Affiliations and Accolades:
- ADU Specialist
- Earth Advantage Certified
- Portland NAACP (Member)
- LRR Diversity Chair Award Winner
- Lents Neighborhood Association (Former President)
- Youth Rights and Justice (Board Member & Sponsor)
- Asian Real Estate Association of America (Member)
- National Association of Real Estate Brokers (Member)
- Portland Metropolitan Association of Realtors (Member)
- Broker Advisory Group at Living Room Realty (2024-2026)
- T: 971-230-8164
- jessicaw@livingroomre.com
