Making regular additional payments on your principal provides huge savings. Borrowers pay extra on principal in many different ways. For many people,Perhaps the simplest way to organize this process is to make one extra payment per year. If you can't pay an extra whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Finally, you can commit to paying half of your mortgage payment every other week. Each option yields slightly different results, but each will significantly reduce the length of your mortgage and lower the total interest paid over the life of the loan.
It may not be possible for you to pay extra every month or even every year. Keep in mind that most mortgages will permit you to pay extra on your principal at any point during repayment. You can benefit from this rule to pay extra on your mortgage principal when you come into extra money.
For example: a few years after moving into your home, you receive a larger than expected tax refund,a large inheritance, or a cash gift; , investing several thousand dollars into your mortgage principal will significantly shorten the duration of your loan and save enormously on mortgage interest paid over the duration of the loan. For most loans, even a small amount, paid early enough in the mortgage, could offer huge savings in interest and in the duration of the loan.
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