Here's a simple trick to reduce the repayment period of your mortgage and save thousands of dollars in interest: Make extra payments that apply toward your loan principal. People use different methods to meet this goal. Paying 1 extra full payment one time per year is likely the simplest to track. If you can't afford to pay an additional whole payment in one month, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Finally, you can commit to paying half of your mortgage payment every other week. Each option produces slightly different results, but each will significantly shorten the length of your mortgage and lower the total interest paid over the duration of the loan.
Some borrowers can't manage any extra payments. But it's important to note that most mortgage contracts will allow you to make additional principal payments at any time. You can benefit from this rule to pay extra on your mortgage principal when you get some extra money. Here's an example: a few years after moving into your home, you receive a very large tax refund,a very large inheritance, or a cash gift; , investing a few thousand dollars into your home's principal will significantly shorten the duration of your loan and save a huge amount on mortgage interest paid over the duration of the loan. For most loans, even a modest amount, paid early enough in the loan period, could offer big savings in interest and duration of the loan.
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