How to Save Thousands of Dollars in Interest
and Pay Your Mortgage off Faster
Here are a few easy ways to buffer your principle payments, which can end up saving you a ton of money in interest expenses and get you mortgage-free sooner than you thought possible. Here are a few simple strategies you can use:
1. Round your monthly payment up
The results of this simple strategy can save you a fortune and drastically reduce the length of your mortgage.
As an example, if your monthly mortgage payments were $734 dollars a month, but you rounded it up to $800 per month, you would save more than $48,000 in interest payments, and reduce the length of your mortgage by 7.5 years!
2. Make One Time Pre-Payments Using Your Income Tax Refund
This is an easy way to save money and shorten your mortgage. For example, if you have a $100,000 mortgage, and you have a $1000 tax refund this year, you can apply that refund to your mortgage. Over time, this will save you more than $8600, and shave 1 year and 1 month off your mortgage! That's another formidable result from a simple strategy.
3. Choose a Shorter, 15 Year Mortgage
If you can afford it, you are far better off getting a 15 year mortgage instead of 30. It won't cost you much more, and the interest savings are truly worthwhile.
If you have a mortgage of $100,000 at 8% interest over 15 years, as opposed to 30, your monthly payment would be about $200 more, but you'd end up saving $92,083 in interest over the life of your mortgage! That's money that would otherwise be going into the bank's pocket, which could instead be chanelled into an investment to work for you!
These are just a few easy ways to reduce your interest expenses and shorten your mortgage period, letting you get more value out of your money.