Cut years off of your mortgage

Here are a few simple ways to literally cut years off of your mortgage. The first and most obvious one is to choose a smaller amortization period. Taking a $100,000 mortgage at 5% from a 25 year amortization period to a 15 year amortization period will save you $32,619.21 in interest cost over the life of the mortgage. You may also consider increasing your monthly payments. Every little bit helps. On a $100,000 mortgage with an interest rate of 5%, increasing your monthly mortgage payment by just $50.00 per month will pay that mortgage off in just over 21 years as opposed to 25 years. Another idea is to make lump sum payments. On a $100,000 mortgage at 5% interest, making one extra payment of $500 a year will reduce your amortization to 22 years from 25 years. The most common change is to the frequency of your payments to bi-weekly instead of monthly. On a $100,000 mortgage at 5% interest you will cut back your amortization to 21.5 years instead of 25.