5 Ways To Save On Your Mortgage Payments

Property taxes are a major component of many mortgage payments, and they’re often higher than they should be. Local tax assessments can be inaccurate or outdated, especially if nearby home values have fallen or your property was overvalued. Homeowners can appeal their tax assessment with their county or city, usually by submitting comparable sales or documentation. A successful appeal can lower your tax bill for years—not just one month—resulting in meaningful, ongoing savings baked directly into your mortgage payment.

If you put less than 20% down when you bought your home, you’re likely paying private mortgage insurance every month. PMI can easily add a few hundred dollars to your payment—and the worst part is it doesn’t benefit you at all. Once your home equity reaches 20%, you can often request PMI removal. This may happen through paying down the loan, home appreciation, or refinancing. Removing PMI doesn’t require changing your loan balance or rate, yet it can significantly slash your monthly obligation almost instantly.

Making biweekly mortgage payments—half your monthly payment every two weeks—results in one extra full payment per year. That extra payment goes directly toward principal, reducing interest faster and shortening the loan term. Some lenders offer official biweekly plans, but you can often do this yourself without fees by making principal-only payments. While this may not instantly cut the payment in half, over time it can eliminate years of payments and tens of thousands in interest, effectively slashing your long-term mortgage cost.

House hacking is one of the fastest ways to “cut” your mortgage payment without changing the loan itself. Renting out a spare bedroom, basement, garage apartment, or accessory dwelling unit can offset a huge portion of your monthly payment. In high-demand areas, a single room rental can cover 30–70% of a mortgage. Short-term rentals can generate even more, depending on local rules. While it requires effort and planning, this strategy turns your home into an income-producing asset instead of a pure expense.

A large portion of your mortgage payment often comes from escrowed costs like homeowners insurance and property taxes—not the loan itself. By shopping around for a lower homeowners insurance policy, increasing your deductible, or bundling coverage, you may significantly reduce your monthly escrow payment. Some homeowners can also remove escrow entirely and pay taxes and insurance separately, giving more control over cash flow. While the loan balance stays the same, lowering escrow costs can meaningfully shrink your monthly payment and create the feeling of a “cut in half” mortgage without touching your mortgage contract at all.

One of the most powerful ways to dramatically reduce your monthly mortgage payment is refinancing. If interest rates have dropped since you bought your home—or if your credit score has improved—you may qualify for a much lower rate. Even a 1–2% reduction can save hundreds per month. Some homeowners also refinance into a longer term to lower monthly payments, while others switch from an adjustable-rate to a fixed-rate loan for stability. Always compare closing costs against monthly savings to make sure the refinance truly pays off over time.

Find Out How Much You Could Save