Here's a simple trick to reduce the repayment period of your mortgage and save you thousands of dollars over the course of your loan: Make additional payments that apply toward your principal. You can pay more on principal by employing various techniques. For many people,Perhaps the easiest way to organize this process is by making 1 additional payment every year. If you can't afford to pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Finally, you can commit to paying a half payment every other week. Each option yields different results, but they will all significantly reduce the length of your mortgage and lower the total interest paid over the life of the loan.
Some people just can't make extra payments. Keep in mind that almost all mortgages will allow you to pay extra on your principal at any point during repayment. You can take advantage of this rule to pay extra on your principal any time you come into extra money. For example: five years after moving into your home, you receive a larger than expected tax refund,a large legacy, or a non-taxable cash gift; , investing a few thousand dollars into your home's principal will shorten the repayment period of your loan and save a huge amount on mortgage interest over the life of the mortgage loan. Unless the loan is very large, even modest amounts applied early can yield huge benefits over the duration of the loan.
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