There's a trick to reduce the repayment period of your mortgage and save thousands of dollars over the course of your loan: Make additional payments that apply toward the loan principal. People use different methods to meet this goal. Making one extra payment one time per year is probably the easiest to track. If you can't pay an extra whole payment in one month, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Another option is to pay half of your payment every other week. The effect here is that you will make one additional monthly payment each year. These options differ slightly in lowering the final payback amount and reducing payback length, but each will significantly shorten the duration of your mortgage and lower the total interest you will pay over the duration of the loan.
Some borrowers just can't make extra payments. Remember that most mortgage contracts will allow you to pay extra on your principal at any point during repayment. You can benefit from this rule to pay extra on your mortgage principal when you come into extra money.
For example: several years after moving into your home, you receive a larger than expected tax refund,a very large inheritance, or a cash gift; , investing a few thousand dollars into your mortgage principal can significantly reduce the repayment duration of your loan and save a huge amount on mortgage interest over the life of the loan. For most loans, even a small amount, paid early in the mortgage, could offer huge savings in interest and in the duration of the loan.
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