There's a simple 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 to your principal. People make this happen in a few different ways. Making one additional payment once every year is probably the simplest to keep track of. Of course, many people will not be able to pull off this huge additional expense, so dividing one extra payment into 12 additional monthly payments is a fine option too. Finally, you can pay a half payment every other week. Each of these options yields slightly different results, but they will all significantly shorten the duration of your mortgage and lower the total interest you will pay over the life of the loan.
It may not be possible for you to pay extra every month or even every year. But you should remember that most mortgage contracts allow additional payments at any time. Whenever you get some extra cash, you can use this provision to make an additional one-time payment on your mortgage principal.
For example: five years after buying your home, you get a very large tax refund,a very large inheritance, or a cash gift; , you could pay a portion of this money toward your mortgage loan principal, which would result in huge savings and a shorter loan period. For most loans, even a relatively small amount, paid early enough in the mortgage, could offer huge savings in interest and length of the loan.
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