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Increase your monthly payment
One of the easiest and most effective ways to save money on your mortgage and pay off your home faster is to increase your monthly payment. By making an extra payment each year, you can shorten your mortgage term and save thousands of dollars in interest over the life of your loan. For example, if you have a 30-year mortgage with a $200,000 balance and a 4% interest rate, increasing your monthly payment by just $100 can save you over $26,000 in interest and shorten your loan term by over 3 years.
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Refinance your mortgage
Refinancing your mortgage is another excellent way to save money on your mortgage and pay off your home faster. By refinancing to a lower interest rate, you can reduce your monthly payment and save thousands of dollars in interest over the life of your loan. For example, if you have a $300,000 mortgage with a 4.5% interest rate and refinance to a 3.5% interest rate, you could save over $47,000 in interest over the life of your loan.
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Make bi-weekly payments
Making bi-weekly mortgage payments is another hack that can help you save money on your mortgage and pay off your home faster. By making 26 bi-weekly payments each year instead of 12 monthly payments, you can shave years off your mortgage term and save thousands of dollars in interest over the life of your loan. For example, if you have a 30-year mortgage with a $250,000 balance and a 4% interest rate, making bi-weekly payments can save you over $34,000 in interest and shorten your loan term by over 4 years.
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Pay extra toward your principal
Paying extra toward your principal is another hack that can help you save money on your mortgage and pay off your home faster. By making extra payments toward your principal each month, you can reduce the amount of interest you pay over the life of your loan and shorten your mortgage term. For example, if you have a 30-year mortgage with a $200,000 balance and a 4% interest rate, paying an extra $100 each month toward your principal can save you over $23,000 in interest and shorten your loan term by over 2 years.
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Consider a shorter loan term
Finally, if you're in the market for a new mortgage, consider opting for a shorter loan term. While a 30-year mortgage may offer lower monthly payments, a 15 or 20-year mortgage can save you tens of thousands of dollars in interest over the life of your loan. For example, if you have a $300,000 mortgage with a 4.5% interest rate, opting for a 15-year mortgage instead of a 30-year mortgage could save you over $135,000 in interest over the life of your loan.
In conclusion, saving money on your mortgage and paying off your home faster is possible by using these 5 genius hacks. By increasing your monthly payment, refinancing your mortgage, making bi-weekly payments, paying extra toward your principal, and considering a shorter loan term, you can save thousands of dollars in interest and shave years off your mortgage term. These hacks may require some discipline and sacrifice, but they can ultimately help you achieve.