3 ways to reduce your 30-year mortgage

ATLANTA - The biggest part of your budget is your mortgage if you’re a homeowner. And if you can reduce any of that off, it’s savings. Here are ideas for cutting back on paying the interest for 30 years and slicing off a few years on that loan.

Before we start, know that all of these include relatively painless ways to pay extra monthly, but it’s important to make sure that extra money goes directly to your principal. Maybe you can’t maintain that the entire loan, but doing it those first years when you pay most of the interest will really be advantageous long term. 

BIWEEKLY PAYMENT. Lots of people do this one. Make half mortgage payment every two weeks, and without realizing it, you are making an extra payment annually cutting off years on that 30-year loan. 

ROUND UP. Want to shave off a hair more? Round up your mortgage to the next $100. If you pay about $1,610 and pay an extra $90 each month, rounding up to $1,700, you can save close to $40,000 on interest and chop off a few years on the loan.

BUY UNDER BUDGET, PAY MORE. This one has whopping savings. Buy a home 25 percent under your top budget but pay monthly the top of your budget. 

WATCH: FOX 5 Atlanta live news coverage

Here’s some ballpark math on this one offered up on the website Apartment Therapy encouraging first-time homebuyers to buy under budget. If you can afford a $2,200 monthly payment, buy at 75 percent. In this scenario take that $550 difference and apply it to your principal. Here’s the savings: $130,000 in interest over the life of the loan and shaving off nearly 13 years.

Again, this is ballpark. It’ll depend on the interest rate you get, but it gives you an idea of the long-term saving that can be easier than you thought. Check out Apartment Therapy if you are new to homeownership or thinking about it. 

Download the FOX 5 Atlanta app for breaking news and weather alerts.