Here's a simple trick to reduce the repayment period of your mortgage and save thousands in interest: Make additional payments that go toward your loan principal. Borrowers can pay against principal in various ways. Paying 1 additional payment one time per year is probably the easiest to track. If you can't afford to pay an extra whole payment in one month, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Finally, you can commit to paying a half payment every two weeks. These options differ a little in lowering the final payback amount and reducing payback length, but each will significantly reduce 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. Keep in mind that virtually all mortgage contracts will allow you to make additional payments to your principal at any point during repayment. You can take advantage of this rule to pay extra on your mortgage principal any time you get some extra money. Here's an example: a few years after buying your home, you receive a larger than expected tax refund,a very large inheritance, or a non-taxable cash gift; , you could pay this windfall toward your mortgage loan principal, resulting in huge savings and a shorter loan period. For most loans, even a modest amount, paid early enough in the mortgage, could offer huge savings in interest and in the duration of the loan.
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