Can I make extra payments on my mortgage to pay it off faster?
Curious about Higher interest rate
Yes, you can typically make extra payments on your mortgage to pay it off faster. Making extra payments can help you reduce the loan principal and save on interest costs. Here's how you can do it:
1. Regular Extra Payments: You can make additional payments towards your mortgage principal alongside your regular monthly payments. These extra payments can be of any amount you can afford.
2. Lump Sum Payments: If you receive a windfall, a bonus, or any other significant amount of money, you can make a lumpsum payment towards your mortgage principal. This can significantly reduce the outstanding balance.
3. Increasing Monthly Payments: You can choose to increase your monthly payments, effectively paying more than the minimum required amount. This approach helps pay down the loan faster.
4. PartPayments: Some lenders in India allow you to make partial payments on your loan amount. These partpayments are made towards the principal balance and can help reduce the loan tenure.
Before making extra payments, it's essential to check with your lender about their policies and any prepayment penalties that might apply. Some lenders may charge a fee for prepayment or have specific terms regarding extra payments.
By making extra payments, you can reduce the overall interest costs and pay off your mortgage faster, helping you achieve financial freedom and homeownership sooner.