Making regular additional payments toward the principal balance yields big savings. People pay extra in several ways. Making one additional payment once per year is probably the simplest to track. If you can't afford to pay an extra whole payment in one month, 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 extra monthly payment each year. These options differ a little in lowering the total interest paid and reducing payback length, but they will all significantly reduce the duration of your mortgage and lower the total interest you will pay over the duration of the loan.
It may not be possible for you to pay down your principal every month or even every year. Remember that almost all mortgage contracts will permit you to make additional payments to your principal at any time. Any time you come into unexpected money, you can use this rule to pay a one-time additional payment toward your mortgage principal.
If, for example, you receive a surprise windfall just a few years into your mortgage, you could pay a portion of this money toward your mortgage loan principal, which would result in enormous savings and a shortened payback period. Unless the mortgage loan is very large, even a few thousand dollars applied early can yield huge benefits over the life of the loan.
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