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 which are applied to the loan principal. People employ various techniques to meet this goal. Making a single extra full payment one time every year is perhaps the easiest to track. But some people can't swing such a large additional expense, so dividing an additional payment into twelve extra monthly payments works as well. Finally, you can commit to paying a half payment every other week. Each of these options produces slightly different results, but they will all significantly shorten the duration of your mortgage and lower the total interest paid over the duration of the loan.
Some people can't manage any extra payments. Remember that virtually all mortgage contracts will permit you to pay extra on your principal at any time. You can take advantage of this provision to pay extra on your principal when you get some extra money.
For example: a few years after buying your home, you get a very large tax refund,a very large legacy, or a non-taxable cash gift; , paying a few thousand dollars into your mortgage principal will significantly reduce the repayment period of your loan and save enormously on mortgage interest paid over the duration of the loan. For most loans, even this relatively small amount, paid early enough in the loan period, could offer big savings in interest and in the duration of the loan.
Do you have a question regarding a mortgage program?