Can’t afford to make an extra payment? Do this, instead.

Mortgage rates are the lowest they ever been in American history right now, but interest paid is still almost always money lost, right?

Here’s the fix. I have known the tip of “make 13 payments” for ages, but I’ve never had an extra payment just lying around to pay as a lump sum, so I took the same wisdom and cut it down into a manageable size for my own budget.

A x 13 = B.
B divided by 12 = C

Let’s do the math together. So, my current mortgage payment is $1075 per month. But if I pay $1,164 per month ($89 more), I’ll essentially be making 13 payments per year instead of 12.

$1075 x 13 months = $13975 paid per year.

$13975 divided by 12 months = $1,164 that needs to be paid each month to equal 13 payments per year.

Doing this has cut years off of my term, helped me build a ton of additional equity, and pay less interest…all while not really feeling like I’m doing anything. Make sure you specify for the extra dollars to go to your “principle loan balance” only. Most mortgage companies will apply it correctly, but this cuts out any funny business.

You can use this equation and logic with your mortgage, car payment, or any other bill you’ve got. If you REALLY want to get cute, round it up. Instead of me paying $1,164… if I rounded up $1,175 or even $1,200…I’d see my balance fall faster.

Do what you gotta do to secure your financial security, fam.