How to Lower your Mortgage Repayments

Many people believe, quite mistakenly, that there is no way to reduce mortgage repayments once a deal has been struck with a loaning institution. However, the savviest investors recognize that this is one of the main ways to save money over the long term. Below are just a few ways that the average person can reduce home mortgage repayments.


There are two major ways to reduce mortgage repayments – through refinancing and non-refinance options. The first option, a refinance, requires that you have built up some equity in your home or that you have a good relationship with your banking institution. If either of these things is true, then you have a very good chance of being able to refinance as long as you can time the market correctly so that it is in your favor.

If you have been making payments on your home and are currently up-to-date, you are also a good prospective candidate for refinancing. Have a talk with your banker or loaning institution and determine if there is a mutually beneficial situation that could perhaps see you paying off the loan earlier or create a lower monthly payment.

Non-Refinancing Reductions

If you do not have the option to refinance, there are still many ways in which you can lower your mortgage repayments. The first way is by simply making a larger lump sum payment so that your subsequent payments are smaller because of the dent that you have placed in the principal on the home. For this arrangement to work, you must be sure that you have an agreement with your banking institution that credits any overpayment of the monthly bill to the principal on the real estate rather than attributing it to additional interest payments.

Another option is to extend the term of your loan. This will have the same effect as refinancing a home in that the homeowner will be responsible for less money per month. Even if the effective interest rate remains the same, it should be noted that the total interest paid on the home will go up because of the extended time that the loan will be active. Banks may be open to the solution because it means more profit for them, as long as they can ensure that you will actually have the funds to pay the loan back for that long period of time.

In short, there are many options that you can take based on your personal situation and your relationship with your bank. Make sure that you have the advice of a good attorney and tax accountant before you make any decision final.

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Posted on May 22, 2023