Suze Orman’s 4 best mortgage hacks for homebuyers

Homeownership is one of the most important financial decisions most people make in their lifetime. Purchasing a house isn’t just about deciding on a long-term place to live; it’s also a major financial investment, and one that is usually funded by taking on a massive amount of debt that typically takes decades to pay off. That’s why knowing how to handle the mortgage process responsibly is so important. 

And when it comes to mortgage advice, few figures are armed with more insight than pop finance pundit Suze Orman, who has purchased properties in New York, Florida, the Bahamas, South Africa, among a host of other real estate holdings. 

Suze Orman has been one of the most prominent figures in personal finance since the mid-90s. Now in her 70s, Orman hosts the “Women & Money” podcast, a nod to her bestselling 2007 book of the same name. The popular podcast, which features calls from listeners and covers every aspect of personal finance, from budgeting and saving to paying down debt to exploring first-time homeownership, comes out twice per week. 

After more than three decades in personal finance media, including 13 books, multiple television shows, and now a successful podcast, Orman has learned a trick or two about how to manage a mortgage. These are her three most important insights for homebuyers considering taking on hundreds of thousands in debt to fund the purchase of a home. 

Don’t take out a mortgage just because you think you should 

Becoming a homeowner has long been considered one of the cornerstones of achieving financial success, but that doesn’t mean taking out a mortgage is the right move for everyone, something Orman stresses to her readers and listeners. 

When discussing the rent vs. buy conundrum in a 2024 interview on CNN, Orman stated, “If you can afford to buy, you always buy.” The keyword here is “afford.” And in the context of taking out a mortgage to buy a home, being able to afford a home means these three things: 

You have saved enough money for a 10–20% down payment and are free of credit card debt. You can afford to pay the annual property tax on the home you’re considering.You have enough additional savings in an emergency fund to cover unexpected repairs and maintenance, as well as 6–12 months of mortgage payments should you lose your job. 

Related: Suze Orman’s 5 best pieces of financial advice

On the other end of the spectrum, Orman advises opting to rent over taking out a mortgage if any of the following are true:

You still have credit card debt: According to Orman, if you still owe high-interest credit card debt, you’re not ready to take on new debt in the form of a mortgageYou haven’t saved enough for a 10–20% down payment: The larger your down payment, the less you’ll pay in interest over the term of your mortgage. This is incredibly important because over the life of a mortgage, many homeowners pay nearly as much in interest as the actual principal cost of the home. You plan on moving in 5–7 years: When you sell a home, you pay your real estate agent a fee as well as closing costs, which, together, can amount to around 10% of the sale price. If this amount exceeds the amount your home has gone up in value over the time you’ve owned it, it may not have been worth owning at all. It would cost you more to own than to rent: Sometimes, the costs of homeownership exceed the costs of renting, even though a mortgage allows you to build equity. You can use the New York Times’ free calculator to determine how long you’d need to remain in your purchased home for it to pay off relative to renting. 

Ok, so you’ve determined you can afford a home, and you don’t plan to move in the near future. Here’s how to make the most of your mortgage: 

Make one extra mortgage payment per year 

When it comes to your mortgage, time is not on your side — it’s on the bank’s. As mentioned above, interest costs can rival your home’s sale price over the 30-year life of your mortgage. That’s why paying more than is required is one of the best ways to shorten the life of your mortgage, in turn reducing the total amount of interest you pay. 

One of the best ways to do this, according to Suze Orman, is to make the equivalent of one extra mortgage payment each year. There are two ways to do this: 

The first way is to pay half of your monthly mortgage payment every two weeks. Since there are 52 weeks in a year, this results in a total of 26 half-payments, which add up to 13 whole payments each year. The second way is to divide your monthly payment by 12, then add this amount to each of your mortgage payments, so that over the course of each year, you’ve effectively made the equivalent of 13 mortgage payments. 

Orman recommends making an extra mortgage payment each year.

Suze Orman via Facebook

According to Orman, “If you are currently paying 6% on your mortgage, one extra mortgage payment a year can change a 30-year mortgage into a 24.7-year mortgage.”

Recast your mortgage if you get a windfall

There are times in life when a sudden windfall of cash — like an inheritance from a newly deceased family member — can give a homeowner a unique financial opportunity. In a 2021 episode of her podcast, Orman discusses recasting a mortgage, a little-known financial move that can pay off in a big way:

“Recasting is where you simply take a minimum of $5,000 — some banks require $20,000 — where you take the money, and you put it into the account, and you re-cast the mortgage with your mortgage company, which means they reduce the principal that you owe, and they give you a new amortization schedule based on the lower principal amount.”

In other words, recasting allows a homeowner to make a one-time, lump-sum payment directly on their home’s principal balance (not the interest). The lender then recalculates your monthly mortgage payment over the same remaining term, resulting in a lower required monthly payment. 

If you’re already used to paying your typical mortgage payment (or maybe even making the equivalent of an extra payment per year, as discussed above), you can continue doing so and end up paying off your mortgage even faster, which is the best way to reduce the total amount you spend on interest over the life of the loan. 

Pay your mortgage off early if you plan to keep the house

One piece of advice Orman has consistently repeated throughout her tenure in personal finance media is to do whatever you can to have your mortgage paid off and own your home outright by the time you retire — if you plan to continue living there in retirement.

Most retirees live on a fixed income, usually a mix of social security and withdrawals from a retirement account like a 401(K) or IRA, meaning the lower their monthly expenses, the more they have left over to enjoy their golden years. 

The way Orman puts it, “for most households, a mortgage payment is the single largest monthly cost. Removing that cost is a gift in retirement, as it means you need less monthly income to cover your bills.”

According to Orman, paying off your mortgage before you stop working is a gift to your future self, and one that allows you to truly enjoy retirement by eliminating what, for many, is the largest source of recurring financial stress — a mortgage.

Related: Suze Orman’s net worth in 2026: The personal finance icon’s wealth

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