3 Ways to Pay Down Your Principal

When it comes to paying off your mortgage, there is no one-size-fits-all solution – the best strategy depends on your unique circumstances. However, there are a few general tips that can help you pay down your principal in a simpler and more efficient way. So, without further ado, here are three different ways to pay down your mortgage principal.

1. Make Bi-Weekly Payments

Bi-weekly mortgage payments are becoming increasingly popular, as they can help you pay off your mortgage faster and save money on interest. When you make a bi-weekly payment, you are essentially making one extra monthly payment per year. This can help you pay down your principal quicker, as well as save money on interest over the life of your loan. To set up bi-weekly payments, simply contact your lender and ask them to set up automatic payments every two weeks. This way, you can ensure that your payments are always on time, and you never have to worry about forgetting a payment.

2. Make a Lump-Sum Payment

If you come into some extra money – whether it’s from a bonus at work, an inheritance, or a tax refund – you may want to consider making a lump-sum payment towards your mortgage. While this will not reduce your monthly payments, it will reduce the overall amount of interest you pay on your loan, as well as help you pay down your principal quicker. It will further help with your second mortgage rates, too, as your amortization period shortens. So, get in touch with your lender and see if you can make a lump-sum payment on your mortgage.

3. Refinance to a Shorter Term

If you have been making regular payments on your mortgage for a few years, you may have built up some equity in your home. If this is the case, you may want to consider refinancing to a shorter-term loan. This will not only lower your monthly payments but will also help you pay off your mortgage more quickly. And, if you refinance to a lower interest rate, you could save even more money in the long run. Remember that when you refinance, there are closing costs involved, so make sure you factor this into your decision.

To Sum It Up

Paying down your mortgage principal doesn’t have to be complicated or difficult – there are a number of different ways to do it. Just pick the strategy that makes the most sense for your unique circumstances and contact a professional company for a mortgage in Toronto so that you can get started. And, before you know it, you’ll be on your way to becoming a homeowner. Good luck!

Donna Enn