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How can I reduce my mortgage loan payments?

There are several ways to save interest, sometimes thousands of dollars in interest. Consider:

  • Make a larger down-payment, thereby reducing the amount of your home loan.
  • Shop around to find the lowest interest rate you can. Don't automatically go through the lender that your realtor recommends. Check out at least three other options. Realtors are not always current on the best rates and might tend to favor lenders they know.
  • Shorten the length of your mortgage. Getting a 15-year mortgage instead of a 30-year mortgage saves substantially more than half the total interest you will pay. The monthly payment may be a little higher, but you will save thousands of dollars in interest over the life of the loan.
  • Pay extra on your house payment each month. Every extra dollar you pay will go directly to reducing the principal. This shortens the length of the loan and reduces the total amount of interest you must pay. With just a few extra dollars a month, you can reduce the length of your loan by 3 or more years and save several thousand dollars in interest.
  • Get a bi-weekly mortgage that has payments due every two weeks for 26 total payments per year. Like making extra payments, this also will shorten the length of your loan and save thousands of dollars in interest.




Brenda Procter, M.S., Consumer and Family Economics, College of Human Environmental Sciences, University of Missouri-Columbia












If you'd like to learn more about this and other personal finance topics, the University of Missouri offers 'Personal & Family Finance,' a correspondence course, through the Center for Distance and Independent Study (800-609-3727). Information about this course is available at





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Last update: Tuesday, July 22, 2008




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