There's a simple trick to significantly reduce the length of your mortgage and save thousands over the course of your loan: Make additional payments which go toward your loan principal. You can pay against principal by employing various techniques. Making one extra payment once a year is likely the easiest to track. However, many people won't be able to afford this huge additional payment, so dividing an additional payment into 12 extra monthly payments works as well. Finally, you can commit to paying half of your mortgage payment every other week. Each of these options produces slightly different results, but they will all significantly shorten the length of your mortgage and lower the total interest you will pay over the life of the loan.
Some people just can't make any extra payments. But remember that most mortgage contracts allow you to make additional principal payments at any time. You can take advantage of this rule to pay down your mortgage principal any time you get some extra money.
Here's an example: a few years after moving into your home, you get a very large tax refund,a large legacy, or a cash gift; , paying several thousand dollars into your home's principal can shorten the repayment duration of your loan and save a huge amount on mortgage interest paid over the life of the loan. Unless the loan is quite large, even a few thousand dollars applied early in the loan period can yield huge savings over the life of the loan.
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