How to Lower Your Monthly Mortgage Payment in 2022

Mar 10, 2022 By Susan Kelly

A high mortgage can represent a substantial portion of your earnings, leaving you with less to cover the rest of your living expenses. As a guideline about how to lower your monthly mortgage payment, reducing your mortgage expenses at least thirty percent of home income is recommended. If you're trying to figure out how to decrease your mortgage payments every month, there are many ways to reach this target. Here are seven ways to cut down on your mortgage

1. Repay Your Loan For A More Extended Period

An easy way to reduce the cost of your mortgage is to extend the duration of your loan (which is sometimes called re-casting or the process of re-amortizing). It is not necessary for refinancing your mortgage to achieve this, as most lenders provide this service for an amount of around $250. If you decide to extend your 15-year mortgage into 30 years and pay your mortgage every month, the amount will be lower since you'll have a longer time to pay off the loan by extending the period. You'll be paying greater interest to your mortgage over time; using this method is best for those who require a quick way to solve cash flow problems.

2. You Can Apply For A Modification To Your Loan

If you've been through a severe financial strain and your mortgage is not affordable, A loan modification could be an alternative. This is when a lender alters the loan to reduce the monthly payments. You don't need to be in debt in mortgage payments to ask for a modification to your loan with your loan provider. Suppose you're experiencing an imminent decrease in income due to the loss of work or retirement. In that case, it's a good idea to contact your lender to inquire about a loan modification in advance.

3. Refinance For A Lower Interest Rate

Suppose you're not looking to alter the timeframe for your repayment drastically. In that case, it is possible to lower your monthly payment through refinancing to secure an interest rate lower than what you pay with your current mortgage. The effects of lower interest rates can be enormous in terms of the monthly installment. However, the exact details will depend on the circumstances. Consider the following example: A 30 year home loan of $300,000 and APR of 4 percent would mean the total interest and principal payment of $1,432. If you could pay back the loan amount in the same time frame, but with an APR of 3%, your monthly payment would be reduced to 1 265.

4. Move To A Less Expensive Home

Some people end up ending up with more houses than they can afford. If you've decided that you cannot afford your mortgage and other options aren't working, you should consider selling your home. A home that you cannot afford could result in insomnia, heartache, and even a default, the most disastrous result for your financial situation. If you sell your house, you can use the proceeds to purchase an affordable home or put the money into renting. Ensure you include an estate commission when you choose to use an agency for marketing your property.

5. Increase The Timeframe To Pay Back The Loan

The length of your mortgage can reduce your monthly mortgage payment for all types of mortgages, excluding interest-only. The disadvantage is that it will mean that you'll have to will pay more over the long term. But, you could still overpay if you can pay the entire amount back within the period initially. If you have to delay your payment or even spend a few months paying a little less, this won't cause any issues for the lender.

6. Move To A Less Expensive Mortgage Company

Another option to reduce your mortgage payment is to get an improved mortgage. Are you getting the lowest rate? You may be required to pay for your current charges for administration of your lender, as well as any early redemption penalties that could apply. However, you may still be able to make savings by changing mortgage companies. Getting a mortgage is a time when it is worth more time looking through as many options as you can. There are many deals available every day, and you might find yourself saving one or two hundred pounds every month.

7. Rent Out Extra Space

Don't forget that you may be able to let someone else help you assist you in paying a portion of your monthly mortgage payment if you're looking to rent out additional space. It could be as simple as the basement of your house being converted into a separate apartment. Still, it may also mean acquiring an additional roommate or renting rooms. This isn't suitable for everyone. You'll be mindful of the guidelines of your mortgage that pertain to renting your home and any local laws regarding renting out residential properties. However, renting out a portion of your home is something you should consider if you're looking to lower your housing costs, and other options listed here will not work.


There are multiple ways to reduce your mortgage payments. To figure out the best solution for you, you must decide if you require a short-term or long-term option. Consider your options carefully and conclude before taking the next step.

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