A method for reducing the order of system models exploiting sparsity is disclosed. According to one embodiment, a computer-implemented method receives a system model having a first system order. The system model contains a plurality of system nodes, a plurality of system matrices. The system nodes are reordered and a reduced order system is constructed by a matrix decomposition (e.g., Cholesky or LU decomposition) on an expansion frequency without calculating a projection matrix. The reduced order system model has a lower system order than the original system model.