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There's a simple trick to significantly reduce the length of your mortgage and save thousands over the course of your loan: Make additional payments which apply toward the loan principal. People employ various techniques to accomplish this goal. For many people,Perhaps the easiest way to keep track is by making 1 extra mortgage payment a year. If you can't pay an extra whole payment in one month, you can divide your payment by 12 and write a check for that additional amount monthly. Another option is to pay a half payment every other week. The effect here is that you make one additional monthly payment every year. Each option produces different results, but each will significantly shorten the duration of your mortgage and lower the total interest you will pay over the duration of the loan.
One-time Additional Payment
It may not be possible for you to pay extra every month or even every year. But it's important to note 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 provision to pay a one-time additional payment on mortgage principal. If, for example, you receive a surprise windfall three years into your mortgage, paying a few thousand dollars into your home's principal can significantly reduce the duration of your loan and save a huge amount on mortgage interest paid over the duration of the mortgage loan. For most loans, even this small amount, paid early in the mortgage, could offer huge savings in interest and duration of the loan.
