Paying consistent extra payments on the principal provides big returns. People accomplish this goal in a few ways. For many people,Perhaps the simplest way to organize this process is to make 1 extra mortgage payment every year. If you can't pay an extra whole payment all at once, you can divide that payment by 12 and pay that additional amount monthly. Another popular option is to pay half of your payment every other week. The effect here is that you make one extra monthly payment in a year. Each of these options yields slightly different results, but they will all significantly reduce the duration of your mortgage and lower the total interest you will pay over the duration of the loan.
It may not be possible for you to pay more every month or even every year. Remember that most mortgages will allow you to make additional payments to your principal at any point during repayment. Whenever you get some extra cash, you can use this rule to make a one-time additional payment toward mortgage principal. If, for example, you receive a surprise windfall five years into your mortgage, you could pay this windfall toward your mortgage loan principal, which would result in huge savings and a shortened payback period. Unless the loan is quite large, even a few thousand dollars applied early in the loan period can yield huge savings over the duration of the loan.
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