There's a trick to significantly reduce the length of your mortgage and save you thousands in interest: Make additional payments that are applied toward the principal. Borrowers use different methods to meet this goal. Paying a single additional payment one time every year may be the simplest to keep track of. If you can't pay an additional whole payment in one month, you can divide that payment by 12 and pay that additional amount monthly. Finally, you can commit to paying half of your mortgage payment every two weeks. Each of these options produces different results, but they will all significantly reduce the length of your mortgage and lower the total interest you will pay over the life of the loan.
It may not be possible for you to pay more every month or even every year. But it's important to note that most mortgages allow additional principal payments at any time. You can take advantage of this rule to pay down your mortgage principal any time you come into extra money.
If, for example, you were to receive a surprise windfall three years into your mortgage, investing a few thousand dollars into your home's principal can significantly reduce the period of your loan and save a huge amount on interest paid over the life of the loan. Unless the loan is quite large, even modest amounts applied early can yield huge benefits over the duration of the loan.
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.