There's a trick to reduce the repayment period of your mortgage and save thousands over the course of your loan: Make extra payments that are applied toward the principal. Borrowers can accomplish this using a few different techniques. For many people,Perhaps the simplest way to organize this process is by making 1 extra mortgage payment every year. 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 write a check for that additional amount monthly. Another very popular option is to pay half of your payment every two weeks. The effect here is that you will make one extra monthly payment in a year. These options differ slightly in reducing the final payback amount and reducing payback length, but they will all significantly reduce the duration 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. But you should remember that most mortgages will allow additional payments at any time. You can benefit from this rule to pay down your mortgage principal any time you come into extra money.
If, for example, you were to receive an unexpected windfall five years into your mortgage, you could pay this windfall toward your loan principal, which would result in enormous savings and a shorter loan period. For most loans, even a relatively small amount, paid early in the mortgage, could offer big savings in interest and in the length of the loan.
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