There are three easy ways to shave off some interest from your mortgage.
Because mortgages typically have a long amortization period, the interest really adds up. In the end, depending on the length of your mortgage and the interest rates, you may end up paying as much, if not more, in interest than the original mortgage amount.
Here are three simple things you can do to significantly reduce the amount of interest you will pay:
1) Principal only payments. Every financial institution has rules about how these can be applied (for example, there are minimum and maximum amounts, as well as yearly frequencies). A friend of mine recently put $3,500 towards her mortgage principal, and saved considerably more than that in interest.
2) Shorten your amortization period. Use this calculator to see what I mean.
3) Pay more frequently. If you are paying monthly, consider bi-weekly or even weekly. The sooner you can reduce the principal, the sooner the amount that the interest is calculated on is lowered.
Remember that interest is how banks make money - whatever you can do to reduce the interest you pay puts some of that money back in your pocket.
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