How to Save on Interest for Mortgage Payments

Shopping for a Rate

1). Check your credit through a website such as AnnualCreditReport.com. You will be asked for your full legal name, Social Security number, date of birth and credit card information. Your credit report will be free, but your score will cost $30 to $40.
2). Analyze your credit report for errors, and report any immediately through the website. Correcting errors and paying credit cards down to 30 percent or less of the credit limit will help you get the highest credit score. The higher the credit score, the lower the interest rate available to the borrower.
3). Compare lenders' rates based on your credit score. Do not allow each lender to check your credit score; this will cause your score to drop. Compare APR (annual percentage rates) to see the overall cost of the loan, which includes not only the monthly interest rate but also the fees.
4). Consider "buying down" your interest rate through the use of points. Points are fees that you pay to purchase a lower interest rate, or buy down the rate. Compare the fee to the interest expense saved. If you can break even on the fee within a year of buying the rate, it might be worth it.

1). Consider making biweekly payments on your mortgage. Making a payment every other week equates to 13 monthly payments in a year. For each additional monthly payment on a 30-year mortgage, the length of the loan (and the overall interest expense) is lessened by seven years.
2). Divide your monthly mortgage payment by 12. Consider adding 1/12th of a payment to each monthly payment, applied toward the principal, as another option to making an additional payment per year.
3). Take the 1/12th payment in Step 2 and multiply it by 2. Consider adding this amount to each monthly mortgage payment to cut a 30-year mortgage almost in half.