Here's a simple trick to reduce the repayment period of your mortgage and save thousands of dollars over the course of your loan: Make extra payments that are applied to the principal. Borrowers pay against principal in various ways. Making 1 extra full payment once every year is probably the easiest to keep track of. 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 half of your mortgage payment every two weeks. Each option yields different results, but they will all significantly reduce the length of your mortgage and lower the total interest paid over the duration of the loan.
Some people can't manage extra payments. Remember that most mortgage contracts will allow you to pay extra on your principal at any point during repayment. You can benefit from this rule to pay extra on your mortgage principal when you get some extra money.
If, for example, you receive a surprise windfall just a few years into your mortgage, you could apply a portion of this windfall toward your loan principal, which would result in enormous savings and a shortened payback period. Unless the loan is quite large, even a few thousand dollars applied early in the loan period can produce huge benefits over the life of the loan.
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