There's a trick to significantly reduce the length of your mortgage and save thousands of dollars over the course of your loan: Make additional payments that are applied toward the loan principal. People employ various techniques to meet this goal. Paying a single extra full payment once per year may be the simplest to arrange. However, some folks can't afford such a large extra expense, so splitting a single additional payment into twelve extra monthly payments is a fine option too. Finally, you can commit to paying half of your mortgage payment every other week. Each option produces different results, but each will significantly reduce the duration of your mortgage and lower your total interest paid.
Some borrowers just can't make extra payments. But it's important to note that most mortgages will allow additional payments at any time. You can take advantage of this provision to pay extra on your mortgage principal any time you come into extra money. If, for example, you were to receive a surprise windfall four years into your mortgage, investing a few thousand dollars into your home's principal can significantly shorten the repayment duration of your loan and save a huge amount on interest over the life of the loan. For most loans, even a small amount, paid early enough in the mortgage, could offer big savings in interest and duration of the loan.
Do you have a question regarding a mortgage program?