Here's a simple trick to reduce the repayment period of your mortgage and save thousands in interest: Make additional payments which are applied toward your principal. You can pay more on principal in various ways. Paying a single additional payment once per year is probably the easiest to track. If you can't afford to pay an extra whole payment in one month, you can divide your payment by 12 and write a check for that additional amount monthly. Another popular option is to pay a half payment every two weeks. The effect here is that you will make one additional monthly payment each year. These options differ slightly in reducing the final payback amount and shortening payback length, but they will all significantly shorten 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. Remember that virtually all mortgage contracts will permit you to pay extra on your principal at any time. Whenever you come into extra cash, you can use this rule to make an additional one-time payment on your principal. If, for example, you were to receive a very large gift or tax refund three years into your mortgage, paying several thousand dollars into your home's principal can reduce the duration of your loan and save a huge amount on interest paid over the duration of the loan. Unless the loan is very large, even a few thousand dollars applied early can produce huge benefits over the life of the loan.
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