There's a trick to reduce the repayment period of your mortgage and save you thousands in interest: Make additional payments which are applied toward your principal. You can do this using a few different techniques. Paying 1 extra payment one time a year may be the simplest to arrange. Of course, some folks will not be able to afford such an enormous additional payment, so dividing an extra payment into 12 extra monthly payments is a fine option too. Finally, you can pay half of your mortgage payment every two weeks. These options differ a little in reducing the final payback amount and shortening payback length, but they will all significantly shorten the duration of your mortgage and lower the total interest paid over the life of the loan.
It may not be possible for you to pay extra every month or even every year. Keep in mind that almost all mortgage contracts will permit you to pay extra on your principal at any point during repayment. You can take advantage of this provision to pay extra on your principal when you get some extra money. Here's an example: five years after moving into your home, you get a larger than expected tax refund,a very large legacy, or a cash gift; , paying a few thousand dollars into your mortgage principal can reduce the repayment period of your loan and save enormously on interest over the life of the mortgage loan. Unless the loan is quite large, even modest amounts applied early can yield huge benefits over the duration of the loan.
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