There's a trick to reduce the repayment period of your mortgage and save thousands of dollars in interest: Make extra payments which go toward the principal. People use different methods to meet this goal. Paying one additional full payment once per year is perhaps the easiest to keep track of. However, some folks can't afford such a large extra expense, so splitting an additional payment into 12 additional monthly payments is a great option too. Another popular option is to pay half of your payment every two weeks. The effect here is that you will make one additional monthly payment every year. Each option yields slightly different results, but they will all significantly shorten the length of your mortgage and lower your total interest paid.
Some people can't manage any extra payments. Keep in mind that most mortgages will permit you to pay extra on your principal at any time. You can take advantage of this provision to pay down your principal when you get some extra money. If, for example, you were to receive a surprise windfall three years into your mortgage, investing several thousand dollars into your mortgage principal can significantly reduce the period of your loan and save enormously on interest over the duration of the mortgage loan. For most loans, even a relatively modest amount, paid early in the mortgage, could offer big savings in interest and duration of the loan.
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