Additional payments in your budget:
It sounds like a great idea to make additional lump-sum payments annually or at the time of renewal, but you my be asking where does this money come from? Reworking your budget to set aside funds in a savings account is an effective strategy. Automatically pay into an account before you even begin to manage your budget, you wont even notice its absence.
Bonus time may have just come or is coming:
With the end of the year just past or your tax returns coming. Whether a set amount or an unknown windfall at this time, a bonus or tax return can often lead to, 'should I pay down my mortgage or go on that trip I've always wanted'? You have to really sit down and think about your overall situation. Paying down your mortgage is always a great option.
Increase your payment amount:
It may take some adjusting to work it into your budget, but increasing your monthly payment amount can save you thousands of dollars in interest over the duration of your mortgage and reduce the life of your mortgage by several years.
Increase the frequency of your payments:
While the most common payment plan is monthly, you may be better off making smaller payments more frequently. In this way you could reduce the amount of interest you pay and reduce your principal more quickly.
Pay more when you can:
If you chose a mortgage that allows you to make contributions outside of your regular payment date, taking advantage of it whenever you can offers considerable savings. You contribution goes directly towards your outstanding principal so your mortgage is immediately reduced by the full amount.
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