Paying regular extra payments toward your principal yields huge savings. Borrowers pay extra in several different ways. Making a single extra payment one time every year may be the easiest to keep track of. Of course, some people can't pull off such a large additional expense, so dividing one additional payment into 12 additional monthly payments works as well. Finally, you can pay half of your mortgage payment every two weeks. These options differ slightly in lowering the final payback amount and shortening payback length, but they will all significantly shorten the length of your mortgage and lower the total interest you will pay over the life of the loan.
It may not be possible for you to pay more every month or even every year. Keep in mind that virtually all mortgage contracts will permit you to make additional payments to your principal at any point during repayment. Whenever you get some extra cash, consider using this rule to make a one-time additional payment toward your mortgage principal.
If, for example, you receive a surprise windfall just a few years into your mortgage, investing a few thousand dollars into your home's principal will significantly reduce the repayment duration of your loan and save a huge amount on mortgage interest paid over the duration of the mortgage loan. For most loans, even a relatively small amount, paid early in the mortgage, could offer huge savings in interest and length of the loan.
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