Here's a simple trick to reduce the repayment period of your mortgage and save you thousands of dollars in interest: Make extra payments which go to the loan principal. You pay extra on principal in many different ways. Paying one extra full payment once a year is probably the simplest to arrange. But some people can't pull off this huge additional payment, so splitting one extra payment into twelve additional monthly payments works as well. Another popular option is to pay a half payment every two weeks. The result is you make one extra monthly payment every year. Each of these options yields different results, but they will all significantly shorten the duration of your mortgage and lower your total interest paid.
Some borrowers can't manage any extra payments. Remember that almost all mortgages will allow you to make additional payments to your principal at any point during repayment. You can take advantage of this provision to pay down your principal any time you get some extra money. If, for example, you receive an unexpected windfall five years into your mortgage, paying several thousand dollars into your home's principal can significantly shorten the duration of your loan and save a huge amount on mortgage interest over the duration of the loan. Unless the mortgage loan is very large, even small amounts applied early can produce huge savings over the life of the loan.
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