Refinancing
Let’s say you took out a 30-year mortgage loan 10 years ago. However, you now make much more money and are able to afford larger payments.
In this case, see if you can refinance your loan through another lender and shorten your loan tenure. Alternatively, if you have an excellent credit score, you might also be able to negotiate a lower interest rate with the new lender. This will amount to plenty of savings in the form of reduced interest expense over the life of the loan.
Biweekly payments
Instead of paying one monthly installment, pay your bank twice every month. This way, you will have paid an amount equivalent to 13 monthly payments. Continuing this over the tenure of your loan will shave off as many as 4-6 years on a 30-year mortgage. If your mortgage loan’s tenure is 15 years, biweekly payments will cut down 1 to 3 years from the total tenure, depending on the rate of interest and the amount of loan. That being said, not all lenders accept biweekly payments, so check with your banker and see if they allow such an arrangement.
Make additional payments towards your principal
If you find it hard to save money, paying off your mortgage works just as well, if not better. See if you can add some extra amount to your monthly mortgage payments. This amount will go towards your principal, which gives two-fold benefits. First, you will reduce your interest expense and save up a few bucks. Second, you will pay off your loan quicker, which again saves you money.
