Paying regular additional payments toward the principal will provide big savings. Borrowers can pay against principal in many different ways. For many people,Perhaps the simplest way to keep track is to make one extra mortgage payment every year. If you can't pay an extra whole payment in one month, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Another option is to pay half of your payment every other week. The result is you will make one extra monthly payment each year. Each option produces different results, but each will significantly reduce the duration of your mortgage and lower the total interest you will pay over the life of the loan.
Some folks can't manage any extra payments. Keep in mind that most mortgage contracts will permit you to pay extra on your principal at any time. Whenever you get some unexpected money, consider using this rule to make a one-time additional payment on your mortgage principal. If, for example, you were to receive a very large gift or tax refund three years into your mortgage, you could apply this money toward your loan principal, which would result in enormous savings and a shorter loan period. Unless the loan is very large, even modest amounts applied early in the loan period can produce huge savings over the duration of the loan.
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