4 Best Money Moves To Save Thousands on Mortgage Interest

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If you have a mortgage, you know that a significant portion of your payments (especially early on) goes towards interest. Over the life of a mortgage, the interest you pay can add up to thousands of dollars. Here are four smart moves you can make to save a lot of money on mortgage interest.

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Shop Around for the Best Rate

Don’t settle for the first mortgage offer you get. Different lenders offer different rates and terms. By shopping around, you can find the best deal. Even a small difference in the interest rate can save you a lot of money over the years. Use online tools to compare rates from different lenders and ask your preferred lender to beat the lowest rate you can find.

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Make Extra Payments

Making extra payments on your mortgage can significantly reduce the amount of interest you pay. Even small additional payments can make a big difference over time. For example, if you get a bonus at work or a tax refund, consider putting that money towards your mortgage. By paying more than the minimum, you reduce the principal faster, which means you’ll pay less interest in the long run.

Refinance Your Mortgage

Refinancing means getting a new mortgage to replace the old one, usually at a lower interest rate. If rates have dropped since you first got your mortgage, refinancing can save you thousands of dollars. Just make sure to consider the costs of refinancing, such as closing fees, to ensure that it makes sense financially.

Choose a Shorter Loan Term

While a 30-year mortgage is common, a 15-year mortgage can save you a lot of money on interest. The monthly payments will be higher, but you’ll pay off the loan much faster and pay less interest overall. If you can afford the higher payments, this can be a great way to save money on mortgage interest, whether you choose the shorter term when getting your initial mortgage or during refinancing.

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