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How to Pay Your Mortgage Loan Off in Half the Time
How to Pay Your Mortgage Off in Half the Time
You can easily cut your mortgage in half by making one extra principle payment each month. A 30 year mortgage can be reduced to 15 years.
How it Works:
When you pay your monthly mortgage payment of principle and interest pay a second amount for the principle portion of the mortgage that is due the following month. Generally your mortgage is a fixed amount e.g. $1,000 per month.
In the Amortisation Schedule example below you can see that the principle payment for the first month is $88.47 and the interest payment is $1,666.67 and the total payment for the first month is $1,755.14.
Using this strategy you would pay the $1,755.14 and $89.21 (second principal payment) in the first month. In the second month you would pay the $1,755.14 and $89.95 (third principal payment) in the second month and so on until you have paid the loan off in half the time.
By doing it this way you do not need to pay interest on the principle amount for the next month.
You will need to get an amortisation schedule from your lender to do this strategy.
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