Two Hacks to Pay off Your Mortgage Faster

Image by GotCredit on Flickr.

Here’s how to pay off your mortgage faster, and cut down on the amount of interest you pay over the life of the mortgage.

1. Ask your lender to switch to bi-weekly payments. Many lenders allow you to cut your mortgage payment in half and pay it twice a month. This allows each payment to be posted, which means each additional payment pays off more principal and less interest than the last. This can cut down the life of a 30-year mortgage by up to 8 years.
2. The second trick is to budget for one extra mortgage payment every year. Before December 30th every year, you can pay one additional payment completely towards the principal of your loan. Your loan will be amortized at the end of the year and you’ll pay less in interest for the following year of payments. This trick can cut down on an additional 8 years on a 30-year mortgage.