There's a simple trick to reduce the repayment period of your mortgage and save thousands of dollars over the course of your loan: Make additional payments that go to your principal. You pay more on principal in various ways. Making one extra payment once every year is likely the easiest to arrange. If you can't pay an extra 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 two weeks. Each of these options yields slightly different results, but each will significantly shorten the duration of your mortgage and lower the total interest paid over the life of the loan.
Some folks can't manage extra payments. But it's important to note that most mortgages allow additional principal payments at any time. Any time you get some extra money, you can use this provision to make an additional one-time payment on your principal. If, for example, you were to receive an unexpected windfall four years into your mortgage, paying a few thousand dollars into your mortgage principal can shorten the repayment duration of your loan and save enormously on interest paid over the duration of the mortgage loan. For most loans, even a relatively small amount, paid early enough in the loan period, could offer huge savings in interest and in the length of the loan.
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