Here's a simple trick to reduce the repayment period of your mortgage and save thousands in interest: Make additional payments which go toward the loan principal. You pay against principal by employing various techniques. Making one extra full payment one time per year is perhaps the simplest to arrange. If you can't pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Another very popular option is to pay half of your payment every other week. The result is you will make one additional monthly payment in a year. Each option yields slightly different results, but they will all significantly shorten 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 payments at any time. Whenever you come into unexpected cash, you can use this rule to make an additional one-time payment on your principal.
Here's an example: a few years after moving into your home, you get a very large tax refund,a large inheritance, or a cash gift; , you could pay a portion of this money toward your mortgage loan principal, resulting in huge savings and a shorter payback period. For most loans, even a relatively small amount, paid early enough in the mortgage, could offer big savings in interest and in the length of the loan.
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