Make one extra mortgage payment a year
Want to pay off your mortgage early? Who doesn't?
If you make just one extra payment a year on a 30-year, fixed-rate loan, you could repay that home loan in as few as 25 years and save thousands of dollars in interest charges.
That's one of three options we recommend for paying your loan faster without incurring any additional fees or costs.
But where do you find the extra money?
Let's say you have a $200,000, 30-year loan with an interest rate of 4.85% APR. You pay $1,055 in principal and interest a month, not including private mortgage insurance (PMI), taxes or insurance.
You might look at the $1,055 and feel daunted by the task of squeezing that much more out of your budget every year.
Tackling that payment in small chunks is the secret.
In our example, you would need to save $88 a month or about $3 a day. Find that money by examining your daily purchases.
Do you smoke? With the average pack of cigarettes now costing more than $5.50, you could find the extra money you need by quitting or cutting back.
Many of us stop by the local coffee shop on our way to work, where premium coffee can set you back $4 or more. Try skipping the daily coffee break or finding a cheaper alternative.
Almost everyone can find money leaking out of their monthly budget if they look hard enough.
You can use our mortgage calculator to determine how quickly extra payments will allow you to pay off your loan and how much you could save in total interest payments.