Photo (cc) by TheTruthAbout

We’ve already written tips on destroying debt this year, but we didn’t specifically cover the biggest debt many people ever face: their mortgage.

According to CNN, the current national average mortgage debt is $173,876. Now imagine if that were your nest egg instead – you’d be on your way to a good retirement. Is there any way to pay off that debt faster?

As it turns out: yes. In the video below, Money Talks News founder Stacy Johnson offers three ways to reach a mortgage payoff faster. Check it out, and then read on for details and what not to do.

In a story on personal independence, Stacy once said, “While it may sound extreme to compare debt to slavery, in a sense that’s exactly what it is. Every debt you have is an invisible ball and chain.” If you’re ready to accelerate on your path to freedom, here are some ideas to do it…

1. Refinance to a shorter loan.

When it comes to any loan, the shorter the better, and mortgages are the prime example. Replacing a 30-year mortgage with a 15-year will save big bucks. For example, if you have a $200,000 mortgage at 5 percent, paying it over 30 years will result in a total interest tab of $186,511. But shortening the term to 15 years means total interest of just $84,685, for a savings of more than $100,000! Of course, that 15-year loan also comes with higher payments. The 15-year loan payment is nearly $1,600/month, while the 30-year is less than $1,100.

So if you can qualify and can afford the higher payment, get a shorter loan. Added benefit? The rates on 15-year mortgages are typically lower than those on 30-year loans. Whether this strategy is sound for you, however, comes down to what you can pay per month, and how much the switch will cost.

As a rule, housing expenses shouldn’t be more than a third of your take-home pay. And because the fees to refinance a mortgage can add up to thousands, just recouping those costs can take months – even years. So be sure to explore all closing costs and fees, and if a refinance still has appeal, before you start, learn to negotiate the best deal. And, of course, it always pays to shop around for the best rates, which is why we have a mortgage search tool.

2. Make extra payments.

Maybe you’ve gotten an offer to skip a loan payment before (on the mortgage, car, whatever) and wondered why the lender was being so nice. The answer, of course, is that they weren’t – you’re still going to pay it, probably with extra fees and interest on top. The best thing you can do with any loan is the exact opposite: pay extra.

There’s a popular program often offered by mortgage lenders that suggests you make your payments bi-weekly (every two weeks) rather than monthly. Since there are 26 two-week periods in a year, paying every two weeks equals making 13 monthly payments. That alone – making one extra monthly mortgage payment every year – will shorten a typical 30-year mortgage to 22 years, and potentially save tens of thousands of dollars over the life of the loan.

The problem with mortgage-company-sponsored bi-weekly plans, however, is that they often come with upfront fees attached: $325 is common. This is an insult. Provided there’s no prepayment penalty, you can always pay extra on your mortgage. Asking you to pay a fee to do something you can do free is despicable.

If you want to mimic the results of a bi-weekly payment program, simply add one-twelfth of a payment to your monthly checks. Just make sure the extra money is applied to principal rather than prepaying future payments.

3. Round up.

If money’s too tight to accelerate your payment schedule or squeeze out an extra payment every year, that’s OK. You can still get ahead by doing something you learned in grade school: rounding to the nearest whole figure. Say your payment is $954 a month – when you’re thinking of your monthly obligation, do you think of it as “nine hundred fifty-four” or “about a grand”? Commit that mental fudge to paper and you’ll thank yourself later.

Not to be repetitive, but make sure that extra money goes to principal – that’s where your cash makes the biggest dent in debt. Your bank might not automatically do it.

What not to do: Abuse home equity

Another option you may have heard of is money merge accounts, or MMAs. The basics: You get a home equity line of credit, or HELOC, by borrowing against the value of your house. This line of credit then essentially becomes the bank account you use to pay your bills (including your mortgage) and it’s where you deposit your income. Because interest is calculated differently on a HELOC than a standard mortgage – daily, instead of monthly – the people who pitch this product make it sound like this will aid in paying off your mortgage in record time. Of course, using this technique often requires expensive software to watch your MMA transactions and tell you how to time payments.

If using your home as collateral to pay for your home sounds convoluted and risky, that’s because it is – you could just as easily come out behind as ahead with bad timing or spending more than you bring in. Without discipline and careful planning, you could ultimately lose your home by failing to repay or refinance the loan in time. And it’s not clear that this method will save you much money, as Stacy explains in Should I Buy a Mortgage Acceleration Program?

Bottom line: Getting ahead on your mortgage is a great idea, and possible even if you don’t have much extra income. Some methods are more complicated or expensive up front than others, while other overhyped strategies just don’t make sense. But one thing that always makes sense is an expression Stacy coined for his book Life or Debt:

Forget what the lender says. The only minimum payment that ever makes sense is the maximum you can afford.

For more on tackling debts big and small, check out Resolutions 2012: 4 Steps to Destroy Debt.