Nothing affects the amount of interest that you pay more than the duration of time it takes you to pay off your mortgage in full. Even if you had received the worst rate in the market each term, you would still be better off if you take advantage of lump sum payment and prepayment options.
However, how do you when you can increase your mortgage payments?
There are several specific times when it is most appropriate. These include:
- When your annual income rises due to a raise or a promotion.
- When you receive an annual or quarterly bonus, you should put most of it onto your mortgage.
- When you work overtime, you should put a percentage of the extra income you receive onto your mortgage priciple balance.
- if you run into an inheritance, gift, or other financial aid, then consider applying these funds against the balance of your mortgage.
The more money you are able to put against your principle balance, then the less money you will end up giving to interest.
By increasing your payments with inflation annuaaly, you can shave off years of interest by using this simple rule.
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