Paying regular extra payments on your principal can yield enormous savings. You can accomplish this in various ways. For many people,Perhaps the simplest way to keep track is to make one extra mortgage payment a year. But some folks will not be able to afford this huge extra expense, so dividing an extra payment into twelve additional monthly payments is a great option too. Another very popular option is to pay a half payment every two weeks. The result is you make one additional monthly payment in a year. These options differ slightly in lowering the final payback amount and reducing payback length, but they will all significantly reduce the length of your mortgage and lower your total interest paid.
Some folks can't manage extra payments. But it's important to note that most mortgage contracts allow you to make additional principal payments at any time. Any time you get some unexpected money, you can use this rule to make a one-time additional payment toward your mortgage principal. If, for example, you receive an unexpected windfall four years into your mortgage, paying a few thousand dollars into your home's principal can significantly reduce the repayment duration of your loan and save enormously on mortgage interest paid over the duration of the mortgage loan. Unless the mortgage loan is very large, even modest amounts applied early can produce huge savings over the duration of the loan.
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