There's a trick to reduce the repayment period of your mortgage and save thousands of dollars over the course of your loan: Make additional payments that go toward the principal. You pay extra on principal in various ways. For many people,Perhaps the easiest way to keep track is by making one extra payment per year. If you can't pay an extra whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Finally, you can pay a half payment every other week. Each of these options produces different results, but each will significantly shorten the duration of your mortgage and lower the total interest you will pay over the duration of the loan.
Some folks can't manage any extra payments. Keep in mind that almost all mortgages will permit you to make additional payments to your principal at any time. Any time you come into extra cash, consider using this provision to pay an additional one-time payment toward mortgage principal.
If, for example, you were to receive a large gift or tax refund five years into your mortgage, paying several thousand dollars into your home's principal can significantly shorten the repayment period of your loan and save a huge amount on mortgage interest paid over the duration of the loan. For most loans, even a relatively modest amount, paid early enough in the loan period, could offer huge savings in interest and length of the loan.
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