Making regular extra payments toward your principal can yield singificant returns. Borrowers use different methods to meet this goal. For many people,Perhaps the easiest way to organize this process is to make 1 extra mortgage payment a year. If you can't afford to 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 pay half of your mortgage payment every two weeks. These options differ slightly in lowering the total interest paid and shortening payback length, but each will significantly reduce the duration of your mortgage and lower the total interest paid over the duration of the loan.
Some folks can't manage extra payments. Keep in mind that virtually all mortgage contracts will allow you to make additional payments to your principal at any time. Whenever you come into extra cash, consider using this rule to make a one-time additional payment toward mortgage principal. If, for example, you were to receive a surprise windfall just a few years into your mortgage, paying a few thousand dollars into your home's principal will significantly reduce the repayment period of your loan and save a huge amount on mortgage interest over the life of the mortgage loan. For most loans, even a relatively small amount, paid early enough in the mortgage, could offer big savings in interest and length of the loan.
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