Paying consistent additional payments toward the principal yields huge savings. You pay against principal in various ways. Making one additional full payment once a year is perhaps the simplest to arrange. If you can't afford to pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Finally, you can pay half of your mortgage payment every two weeks. These options differ a little in lowering the total interest paid and reducing payback length, but each will significantly reduce the duration of your mortgage and lower the total interest paid over the duration of the loan.
It may not be possible for you to pay down your principal every month or even every year. Remember that virtually all mortgage contracts will permit you to make additional payments to your principal at any time. You can benefit from this rule to pay extra on your principal when you come into extra money. Here's an example: a few years after buying your home, you receive a very large tax refund,a very large legacy, or a non-taxable cash gift; , you could apply this windfall toward your mortgage loan principal, which would result in enormous savings and a shorter payback period. Unless the mortgage loan is very large, even a few thousand dollars applied early in the loan period can yield huge savings over the life of the loan.
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