There's a trick to reduce the repayment period of your mortgage and save you thousands of dollars over the course of your loan: Make extra payments which go to your loan principal. People employ various techniques to meet this goal. Paying one additional payment one time every year is likely the easiest to arrange. Of course, many folks can't pull off this huge extra payment, so dividing one extra payment into twelve extra monthly payments is a great option too. Finally, you can commit to paying half of your mortgage payment every other week. Each of these options produces slightly different results, but each will significantly shorten the length of your mortgage and lower your total interest paid.
Some folks just can't make any extra payments. Keep in mind that almost all mortgages will allow you to pay extra on your principal at any time. Whenever you come into extra cash, you can use this rule to make a one-time additional payment toward your principal. If, for example, you were to receive an unexpected windfall five years into your mortgage, you could pay a portion of this money toward your mortgage loan principal, resulting in significant savings and a shortened payback period. For most loans, even this modest amount, paid early in the mortgage, could offer big savings in interest and length of the loan.
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