There's a simple trick to reduce the repayment period of your mortgage and save thousands of dollars in interest: Make extra payments that go toward the principal. You can pay extra on principal in many different ways. Paying 1 additional payment once a year may be the simplest to keep track of. If you can't 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 pay half of your mortgage payment every other week. These options differ slightly in reducing the total interest paid and shortening payback length, but they will all significantly shorten the length of your mortgage and lower your total interest paid.
It may not be possible for you to pay more every month or even every year. Keep in mind that most mortgage contracts will allow you to pay extra on your principal at any point during repayment. Any time you come into extra cash, you can use this rule to make a one-time additional payment toward principal.
For example: a few years after moving into your home, you receive a huge tax refund,a very large legacy, or a cash gift; , paying a few thousand dollars into your home's principal will significantly reduce the period of your loan and save a huge amount on interest paid over the duration of the loan. Unless the mortgage loan is quite large, even small amounts applied early in the loan period can produce huge benefits over the life of the loan.
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