Here's a simple trick to reduce the repayment period of your mortgage and save you thousands in interest: Make additional payments which go to the principal. You can do this using a few different techniques. For many people,Perhaps the simplest way to organize this process is to make one extra payment per year. If you can't pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Finally, you can pay a half payment every other week. Each option yields slightly different results, but each will significantly reduce the duration of your mortgage and lower the total interest paid over the duration of the loan.
Some borrowers can't manage any extra payments. But remember that most mortgages will allow you to make additional principal payments at any time. You can benefit from this provision to pay down your mortgage principal any time you get some extra money. If, for example, you receive a large gift or tax refund four years into your mortgage, you could pay this windfall toward your mortgage loan principal, which would result in significant savings and a shorter payback period. For most loans, even this relatively modest amount, paid early in the mortgage, could offer big savings in interest and in the length of the loan.
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