There's a simple trick to reduce the repayment period of your mortgage and save thousands over the course of your loan: Make additional payments that are applied toward your loan principal. Borrowers accomplish this goal in several different ways. Paying 1 extra full payment once per year is likely the easiest to arrange. If you can't afford to pay an extra whole payment in one month, you can divide that payment by 12 and write a check for that additional amount monthly. Finally, you can commit to paying 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 length of your mortgage and lower your total interest paid.
It may not be possible for you to pay more every month or even every year. But it's important to note that most mortgages allow additional payments at any time. Any time you come into unexpected cash, you can use this rule to make a one-time additional payment on principal.
If, for example, you receive a large gift or tax refund three years into your mortgage, you could pay this windfall toward your loan principal, resulting in enormous savings and a shortened payback period. For most loans, even a small amount, paid early in the mortgage, could offer huge savings in interest and in the length of the loan.
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