Here's a simple trick to reduce the repayment period of your mortgage and save you thousands over the course of your loan: Make additional payments which apply toward the principal. You can accomplish this in several ways. For many people,Perhaps the easiest way to keep track is to make 1 additional mortgage payment every year. If you can't pay an extra 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 half of your mortgage payment every other week. Each option produces slightly different results, but each will significantly shorten the length of your mortgage and lower the total interest you will pay over the duration of the loan.
It may not be possible for you to pay down your principal every month or even every year. Remember that almost all mortgage contracts will allow you to pay extra on your principal at any point during repayment. Any time you come into extra cash, you can use this rule to make a one-time additional payment toward mortgage principal. For example: several years after buying your home, you get a very large tax refund,a large legacy, or a cash gift; , paying a few thousand dollars into your home's principal can significantly shorten the period of your loan and save a huge amount on interest paid over the duration of the loan. For most loans, even this small amount, paid early in the mortgage, could offer huge savings in interest and in the length of the loan.
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