Here's a simple trick to significantly reduce the length of your mortgage and save you thousands of dollars in interest: Make additional payments which are applied toward the principal. People make this happen in several different ways. For many people,Perhaps the easiest way to keep track is to make one extra payment per year. If you can't afford to pay an additional whole payment all at once, you can divide your payment by 12 and pay that additional amount monthly. Another popular option is to pay a half payment every other week. The result is you will make one additional monthly payment in a year. These options differ slightly in reducing the total interest paid and reducing payback length, but they will all significantly reduce the length of your mortgage and lower your total interest paid.
Some people can't manage extra payments. But you should remember that most mortgages allow you to make additional payments at any time. You can benefit from this provision to pay extra on your mortgage principal when you come into extra money. For example: a few years after buying your home, you get a very large tax refund,a very large legacy, or a non-taxable cash gift; , you could apply a portion of this windfall toward your mortgage loan principal, which would result in significant savings and a shortened loan period. Unless the mortgage loan is quite large, even a few thousand dollars applied early can produce huge benefits over the life of the loan.
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