There's a simple trick to reduce the repayment period of your mortgage and save thousands over the course of your loan: Make extra payments that are applied toward the loan principal. Borrowers pay extra in several different ways. Paying one additional full payment once a year is perhaps the easiest to track. 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 write a check for that additional amount monthly. Finally, you can pay a half payment every two weeks. Each option produces slightly different results, but they will all significantly reduce the duration of your mortgage and lower your total interest paid.
Some borrowers can't manage extra payments. But remember that most mortgage contracts will allow you to make additional payments at any time. Any time you get some extra money, you can use this rule to make an additional one-time payment on your mortgage principal. Here's an example: five years after buying your home, you get a larger than expected tax refund,a large inheritance, or a non-taxable cash gift; , investing several thousand dollars into your mortgage principal will significantly reduce the duration of your loan and save a huge amount on mortgage interest paid over the duration of the loan. Unless the loan is very large, even small amounts applied early can produce huge savings over the duration of the loan.
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