There's a simple trick to reduce the repayment period of your mortgage and save thousands of dollars in interest: Make extra payments which are applied toward the loan principal. People make this happen in a few different ways. Paying 1 additional full payment once a year is probably the simplest to track. If you can't afford to pay an extra 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 reducing the total interest paid and shortening payback length, but each will significantly reduce the duration of your mortgage and lower your total interest paid.
It may not be possible for you to pay down your principal every month or even every year. But remember that most mortgage contracts will allow additional payments at any time. Any time you get some extra cash, you can use this provision to make a one-time additional payment on principal. If, for example, you receive an unexpected windfall just a few years into your mortgage, paying a few thousand dollars into your mortgage principal can shorten the repayment period of your loan and save a huge amount on mortgage interest over the life of the mortgage loan. Unless the loan is quite large, even a few thousand dollars applied early can produce huge savings over the life of the loan.
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