Even though you already have a mortgage on your property you can still make adjustments that could save you thousands of dollars. It is very simple, and you don’t have to ask anybody for permission to do it. You just set up a system of your regular payments to go from once a month, very expensive, to every two weeks.
The purpose is to make 26 payments a year rather than 24. A draw back to this is that there will be 2 months of the year when you will have an extra payment of exactly the same as all your other payments. But the savings are worth the extra payments. The savings are always interest costs and all of the money goes to the principle of the loan.
Here are two examples of the possible savings you can realize.
#1 You have a mortgage of $200.000 at 6% interest with 360 months to go before it is paid off. Your current monthly payment is 1194.18.
Here is the first example showing the type of savings of this adjustment, and in each case, you pay off your mortgage in 27.5 years rather than 30 years, saving 2.5 years of payments.
| Loan Amount | Interest Rate | Monthly Pymt | Total Interest | # of Months |
| $200,000 | 6% | $1,198.18 | $231,676.38 | 360 |
| OR | ||||
| $200,000 | 6% | $1,238.91 | $208,841.44 | 330 |
| +$33.73 (extra Monthly) | -$22,774.92 (Savings) |
The $33.73 dollar additional payment will also all go to the principle of the loan.
This would also provide you 2.5 years of no payments which will save you $35,975.40. Together with the other interest savings could provide you with a total interest saving of $58,752.32.
#2 You have a mortgage of $300,000 at 6% interest with 360 months to go before it is paid off. Your current monthly payment is $1,798.50.
| Loan Amount | Interest Rate | Monthly Pymt | Total Interest | # of Months |
| $300,000 | 6% | $1,798.50 | $347,514.57 | 360 |
| OR | ||||
| $300,000 | 6% | $1,858.37 | $313,262.15 | 330 |
| +$60.87 (extra Monthly) | -$34,251.42 (Savings) |
The $60.87 additional payment will also all go to the principle of the loan.
This would also provide you 2.5 years of no payments which will save you $63,955. Together with the other interest savings could provide you with a total interest saving of $98,206.42.
The additional payments in both cases all go straight to the principle, none to the interest. All of the savings are reduced interest costs in one way or the other. The original price of the home is not affected it is the amount of interest you pay that is reduced. The interest payments you make are all kept by the bank and this is another way the banking system takes your money.
This can be done at any time during the mortgage just be changing the payment schedule.
There is one item that must apply to your mortgage payment. Interest must be computed daily. Almost all credit unions charge interest daily. Most banks do not. An additional way the banks steal our wealth. So far, the credit unions are more on our side than the banks.
Note: I am not a financial advisor. You must check everything out for yourself to insure you understand what is happening.
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