There's a simple trick to reduce the repayment period of your mortgage and save thousands in interest: Make extra payments which go to your loan principal. You can accomplish this in various ways. For many people,Perhaps the easiest way to organize this process is by making one additional payment per year. But some people will not be able to swing such a large additional expense, so dividing an extra payment into 12 extra monthly payments is a great option too. Another popular option is to pay a half payment every other week. The effect here is that you will make one extra monthly payment every year. Each option produces slightly different results, but each will significantly reduce the duration of your mortgage and lower the total interest paid over the duration of the loan.
Some folks just can't make any extra payments. But remember that most mortgage contracts will allow additional principal payments at any time. Any time you come into unexpected cash, you can use this rule to pay a one-time additional payment toward your mortgage principal.
If, for example, you receive a surprise windfall four years into your mortgage, you could apply a portion of this windfall toward your loan principal, which would result in enormous savings and a shorter payback period. For most loans, even a small amount, paid early enough in the loan period, could offer huge savings in interest and in the length of the loan.
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