Here's a simple trick to significantly reduce the length of your mortgage and save you thousands in interest: Make additional payments which go to the principal. Borrowers can pay extra on principal in many different ways. Paying a single extra payment one time every year is perhaps the easiest to arrange. If you can't afford to pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Another popular option is to pay half of your payment every other week. The effect here is that you make one additional monthly payment every year. These options differ slightly in lowering the total interest paid and reducing payback length, but each will significantly shorten the duration of your mortgage and lower your total interest paid.
Some borrowers can't manage extra payments. But remember that most mortgages allow you to make additional principal payments at any time. Any time you come into unexpected money, consider using this provision to pay an additional one-time payment on mortgage principal. Here's an example: several years after moving into your home, you receive a larger than expected tax refund,a large legacy, or a cash gift; , paying a few thousand dollars into your mortgage principal will significantly shorten the period of your loan and save a huge amount on mortgage interest over the life of the loan. Unless the mortgage loan is very large, even small amounts applied early can yield huge savings over the life of the loan.
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