There's a trick to reduce the repayment period of your mortgage and save thousands in interest: Make extra payments which go to the principal. You pay more on principal in various ways. For many people,Perhaps the easiest way to keep track is by making 1 extra mortgage payment every year. If you can't pay an extra whole payment all at once, you can divide that payment by 12 and write a check for that additional amount monthly. Another popular option is to pay half of your payment every other week. The effect here is that you will make one additional monthly payment every year. These options differ slightly in reducing the total interest paid and shortening payback length, but each will significantly shorten the length of your mortgage and lower your total interest paid.
Some borrowers can't manage any extra payments. But you should remember that most mortgage contracts allow you to make additional principal payments at any time. You can benefit from this rule to pay extra on your principal when you get some extra money.
If, for example, you were to receive a surprise windfall four years into your mortgage, you could pay a portion of this money toward your loan principal, resulting in huge savings and a shortened loan period. Unless the mortgage loan is quite large, even a few thousand dollars applied early in the loan period can produce huge benefits over the life of the loan.
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