Here are two things you can do to lower your mortgage costs and get closer to owning your whole home.
PAY FORTNIGHTLY
Paying your mortgage every two weeks instead of every month is a smart and easy way to save a good amount of money. The math is pretty easy to understand; As we can see,
We all know that, more or less, a month is two weeks. But there aren't 24 weeks in a year; there are 52 weeks.
are 26. If you pay half of your monthly payment every two weeks, you will make more money overall.
a payment of one more month each year. It's likely that you won't even notice.
Taking a mortgage of $200,000 for 25 years at 7.5 percent as an example. The monthly payment is $1478, and the total cost of interest will be $243,400. If you pay half of what you owe each month,
Each two weeks, the term goes down by two years, bringing it down to about 21 years, and you save almost $54,515 in interest.
KEEP YOUR REPAYMENTS AS HIGH AS YOU CAN, EVEN WHEN RATES DROP
When floating interest rates change, your monthly payment will change to reflect that.
the lower interest rate and to make sure that the length of the loan stays the same. If the price rises,
down, you will have to pay less each time you make a payment. If you choose to keep making
when the rate goes down, the extra payment will be used to pay off the debt.
Pay off the principal and you'll save a lot of money.
At 7.5 percent, that $200,000 mortgage will cost $1478 per month to pay back over 25 years. Let's say that the interest rate drops to 6.5% five years into the term. The lender will drop the monthly payment to $1369 so that the mortgage can still be paid off in 25 years. But if you kept the payment at $1478, the term would drop to 18 years and you would save $22,860 in interest.
