There's a trick to reduce the repayment period of your mortgage and save thousands in interest: Make additional payments which apply to your loan principal. People pay extra in several different ways. Paying a single extra full payment one time a year is probably the easiest to arrange. If you can't afford to pay an additional whole payment in one month, you can divide your payment by 12 and pay that additional amount monthly. Finally, you can pay half of your mortgage payment every other week. Each of these options yields slightly different results, but each will significantly shorten the duration of your mortgage and lower your total interest paid.
It may not be possible for you to pay extra every month or even every year. Keep in mind that virtually all mortgage contracts will allow you to pay extra on your principal at any point during repayment. Any time you get some unexpected cash, consider using this rule to pay a one-time additional payment on principal.
If, for example, you receive a surprise windfall three years into your mortgage, you could apply a portion of this windfall toward your loan principal, resulting in significant savings and a shorter loan period. For most loans, even this small amount, paid early in the loan period, could offer big savings in interest and length of the loan.
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