There's a simple trick to reduce the repayment period of your mortgage and save you thousands of dollars in interest: Make additional payments which apply to your principal. You can do this using a few different techniques. Paying one additional payment one time per year is probably the simplest to track. If you can't pay an additional whole payment in one month, you can divide that payment by 12 and pay that additional amount monthly. Finally, you can pay half of your mortgage payment every other week. These options differ slightly in lowering the total interest paid and reducing payback length, but each will significantly reduce the duration of your mortgage and lower your total interest paid.
Some people just can't make any extra payments. Keep in mind that almost all mortgage contracts will allow you to make additional payments to your principal at any point during repayment. Whenever you get some unexpected cash, you can use this provision to pay an additional one-time payment on principal. For example: a few years after moving into your home, you get a huge tax refund,a very large inheritance, or a cash gift; , you could apply this money toward your loan principal, resulting in huge savings and a shorter loan period. For most loans, even a small amount, paid early enough in the loan period, could offer huge savings in interest and duration of the loan.
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