Own Your Home Faster and For Less
Wouldn’t you rather own your home in 15 or 20 years instead of the typical 30? There are many benefits to refinancing your home but paying your mortgage in less time is probably one of the savviest financial decisions you can make. Reducing the length of the loan by refinancing can not only shave years of payments off your mortgage, allowing you to become financially independent, but you can save you tens of thousands of dollars in the process!
Paying off your home earlier might allow you to retire earlier, travel more, and even have extra cash to invest because it will reduce the overall amount of interest you’ll pay over the life of your loan. You’ll increase your home’s equity even faster. You’ll not only own your home in less time, but you’ll pay much less to own it. Talk to one of our highly-trained Personal Mortgage Advisors today to see how you could benefit from refinancing your home to shorten your term.
Term Reduction Refinance FAQs
- How can I pay off my mortgage faster?
- What are the benefits of a 15 year mortgage?
- Why pay off my mortgage faster?
- How much can I save by reducing my loan term?
There are four simple ways that you can pay your mortgage off faster.
- Make biweekly payments – Rather than making one monthly payment, you can make half the payment every two weeks. If your mortgage payment is $2,000 a month, you would pay $1,000 every other week. Because there are 52 weeks in a year, a biweekly payment schedule will result in the equivalent of 13 full monthly payments per year. The extra payment that you’d be making each year can help you pay your mortgage off 5 years sooner and eliminate 5 years of interest as well.
- Make extra principal payments – Most mortgage lenders allow you to make an extra payment every month and mark it “principal only”. This payment will go directly to pay down the principal (the house itself), rather than both the principal and interest.
- Refinance into a shorter-term loan – If you currently have a 30-year mortgage, refinancing it as a 15-year loan will help you pay it off in half the time, potentially at a lower interest rate as well.
- Put unexpected money you receive into your mortgage payments – If you put the proceeds of tax refunds and annual bonuses towards the principal of the loan, you’d be pleasantly surprised at how quickly you can pay off your mortgage.
How much can I save by reducing my loan term?
Calculate your potential new monthly mortgage payment in seconds with this handy calculator, so you can make sure you have enough money left over each month for all your other expenses. Choose your rate and term—you might be surprised to see how affordable it is to own your home in less time than you thought. See how much interest you’ll pay over the life of the loan, and enter prepayment amounts to calculate their impact on your mortgage.
The Path to Financial Freedom
Switch from a 30 to 15-year term can save you well over $100,000 in interest on a $300,000 mortgage.
Pay off your mortgage faster and you can eliminate the monthly payments and start enjoying financial independence.
Increase Net Worth
Paying your mortgage is like a forced saving and speeding up your mortgage payments increases your net worth faster.
Reducing your the principal on your mortgage faster can improve your credit score by improving your debt to income ratio.
Paying off your mortgage faster improves cash flow and reduces stress so you can enjoy your life more.