Big Savings on Interest: Available to Anyone with a Mortgage
There's a simple trick to reduce the repayment period of your mortgage and save you thousands of dollars over the course of your loan: Make extra payments which go toward the principal. Borrowers make this happen in a few different ways. Paying 1 extra full payment once every year is likely the easiest to arrange. Of course, many folks will not be able to swing this huge additional expense, so dividing a single extra payment into 12 additional monthly payments is a fine option too. Another option is to pay a half payment every other week. The result is you make one extra monthly payment each year. These options differ a little in reducing the total interest paid and shortening payback length, but they will all significantly shorten the duration of your mortgage and lower your total interest paid.
Additional One-time payment
Some people can't manage extra payments. But remember that most mortgages will allow you to make additional principal payments at any time. You can take advantage of this rule to pay extra on your mortgage principal when you get some extra money.
For example: several years after buying your home, you receive a huge tax refund,a very large legacy, or a cash gift; , you could pay a portion of this money toward your loan principal, which would result in enormous savings and a shortened loan period. Unless the loan is very large, even modest amounts applied early can produce huge savings over the life of the loan.