Paying consistent additional payments on the principal balance will yield huge returns. People pay extra in a few ways. Paying one extra payment once per year is probably the simplest to keep track of. If you can't pay an extra whole payment all at once, you can divide your payment by 12 and pay that additional amount monthly. Another popular option is to pay a half payment every two weeks. The result is you will make one extra monthly payment each year. Each of these options yields different results, but they will all significantly shorten the duration of your mortgage and lower the total interest you will pay over the duration of the loan.
Some people just can't make any extra payments. Remember that virtually all mortgage contracts will allow you to make additional payments to your principal at any time. You can benefit from this provision to pay down your mortgage principal when you come into extra money.
If, for example, you receive an unexpected windfall four years into your mortgage, paying a few thousand dollars into your home's principal can shorten the repayment duration of your loan and save enormously on mortgage interest over the duration of the loan. Unless the mortgage loan is very large, even a few thousand dollars applied early can produce huge savings over the duration of the loan.
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