Here's a simple trick to significantly reduce the length of your mortgage and save you thousands in interest: Make extra payments which are applied toward your principal. You can accomplish this in several ways. Making one extra payment once every year is probably the easiest to track. Of course, some people can't pull off such an enormous extra expense, so dividing one additional payment into 12 extra monthly payments works too. Another very popular option is to pay half of your payment every two weeks. The effect here is that you make one extra monthly payment every year. Each of these options yields slightly different results, but they will all significantly reduce the length of your mortgage and lower your total interest paid.
It may not be possible for you to pay extra every month or even every year. Keep in mind that most mortgages will allow you to pay extra on your principal at any point during repayment. Any time you get some extra money, you can use this provision to pay a one-time additional payment toward principal.
If, for example, you receive an unexpected windfall four years into your mortgage, you could apply this windfall toward your loan principal, which would result in enormous savings and a shortened loan period. Unless the mortgage loan is quite large, even a few thousand dollars applied early in the loan period can produce huge benefits over the life of the loan.
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