There's a trick to significantly reduce the length of your mortgage and save you thousands of dollars in interest: Make extra payments that are applied to the loan principal. Borrowers use different methods to meet this goal. For many people,Perhaps the simplest way to keep track is to make one extra payment per year. Of course, many people can't afford such a large additional expense, so splitting a single extra payment into twelve additional monthly payments works as well. Finally, you can pay a half payment every two weeks. These options differ slightly in lowering the total interest paid and reducing payback length, but they will all significantly reduce the length of your mortgage and lower your total interest paid.
Some folks can't manage extra payments. Keep in mind that most mortgages will allow you to make additional payments to your principal at any point during repayment. You can benefit from this provision to pay extra on your principal any time you get some extra money. If, for example, you receive a surprise windfall five years into your mortgage, paying a few thousand dollars into your home's principal will significantly shorten the duration of your loan and save enormously on mortgage interest over the life of the mortgage loan. For most loans, even a relatively small amount, paid early in the mortgage, could offer huge savings in interest and length of the loan.
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