Sun Jul 14 2024, by Tyler Gardner

Introduction

If you insist on paying down your mortgage early, even though it's considered a less favorable strategy in a rising interest rate environment, here are three techniques that you could start using today that could save you tens of thousands of dollars in interest over the life of your loan.

Technique 1: Add 10% to Each Monthly Payment

By adding 10% to each monthly payment, you'll be able to save approximately $50,000 in interest and cut five years off your loan term. Just ensure that this additional 10% goes directly towards paying down the principal.

Technique 2: Add 20% to Each Monthly Payment

If you can manage it, consider adding 20% to each monthly payment. This strategy will save you around $80,000 in interest and reduce your loan by eight years. Again, it’s essential that this extra amount is allocated to the principal.

Technique 3: Switch to Bi-Weekly Payments

This technique is ideal for anyone who is tight on cash each month and doesn't want a significant impact on their budget. Instead of making monthly payments, call your bank and switch to making half payments every two weeks. This results in 26 half payments, which equates to 13 full payments a year. Not only does this approach not affect your finances greatly, but it can also save you $45,000 in interest and reduce the life of your loan by five years.

Conclusion

If any of these tips are beneficial to you, make sure to like and follow for more insights on managing your finances effectively.

Source