Here's a simple trick to reduce the repayment period of your mortgage and save you thousands in interest: Make extra payments which apply toward your principal. You can accomplish this in several ways. For many people,Perhaps the easiest way to keep track is to make one additional mortgage payment per year. Of course, some people will not be able to pull off such an enormous additional expense, so splitting a single additional payment into 12 extra monthly payments is a great option too. Another option is to pay half of your payment every other week. The effect here is that you make one extra monthly payment in a year. These options differ a little in lowering the total interest paid and shortening payback length, but they will all significantly shorten the duration 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 extra every month or even every year. Keep in mind that most mortgage contracts will permit you to make additional payments to your principal at any point during repayment. Any time you get some extra money, you can use this rule to pay an additional one-time payment on your mortgage principal. For example: several years after moving into your home, you receive a larger than expected tax refund,a large legacy, or a cash gift; , paying several thousand dollars into your mortgage principal will reduce the duration of your loan and save enormously on interest over the duration of the mortgage loan. For most loans, even this relatively modest amount, paid early enough in the loan period, could offer big savings in interest and length of the loan.
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