There's a simple trick to reduce the repayment period of your mortgage and save thousands over the course of your loan: Make additional payments that go toward your principal. Borrowers pay extra in several ways. For many people,Perhaps the easiest way to organize this process is by making 1 extra payment every year. If you can't afford to pay an additional whole payment all at once, you can divide your payment by 12 and write a check for that additional amount monthly. Another option is to pay a half payment every two weeks. The effect here is that you make one extra monthly payment each year. These options differ a little in lowering the final payback amount and reducing payback length, but they will all significantly shorten the length of your mortgage and lower the total interest paid over the life of the loan.
It may not be possible for you to pay extra every month or even every year. Remember that most mortgages will permit you to pay extra on your principal at any point during repayment. Whenever you come into unexpected cash, consider using this rule to pay a one-time additional payment toward principal. If, for example, you receive a very large gift or tax refund just a few years into your mortgage, investing a few thousand dollars into your mortgage principal can significantly reduce the repayment duration of your loan and save a huge amount on mortgage interest over the duration of the loan. For most loans, even this small amount, paid early in the mortgage, could offer big savings in interest and duration of the loan.
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