Making regular additional payments on your principal balance will provide big savings. People use different methods to accomplish this goal. For many people,Perhaps the easiest way to organize this process is by making one additional mortgage payment a 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 option is to pay half of your payment every other week. The effect here is that you make one extra monthly payment each year. Each option yields slightly different results, but they will all significantly reduce the length 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 extra every month or even every year. But remember that most mortgage contracts will allow you to make additional payments at any time. Any time you get some unexpected money, you can use this rule to pay an additional one-time payment on your mortgage principal. If, for example, you receive a large gift or tax refund just a few years into your mortgage, you could apply this windfall toward your loan principal, resulting in huge savings and a shorter payback period. Unless the mortgage loan is very large, even modest amounts applied early can produce huge savings over the life of the loan.
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