Here's a simple trick to reduce the repayment period of your mortgage and save you thousands over the course of your loan: Make additional payments that apply to your principal. People use different methods to meet this goal. For many people,Perhaps the easiest way to keep track is by making one additional payment per year. If you can't afford to pay an extra whole payment all at once, you can divide that payment by 12 and write a check for that additional amount monthly. Finally, you can pay a half payment every other week. These options differ slightly in reducing the total interest paid and reducing payback length, but each will significantly reduce the duration of your mortgage and lower your total interest paid.
Some folks can't manage any extra payments. Remember that almost all mortgage contracts will allow you to pay extra on your principal at any time. Whenever you get some extra money, you can use this provision to make a one-time additional payment toward mortgage principal.
If, for example, you were to receive a large gift or tax refund four years into your mortgage, paying a few thousand dollars into your mortgage principal can significantly shorten the repayment duration of your loan and save enormously on interest over the life of the loan. Unless the mortgage loan is quite large, even modest amounts applied early in the loan period can produce huge benefits over the duration of the loan.
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