Paying consistent extra payments toward your loan principal can yield enormous returns. People employ various techniques to accomplish this goal. Paying a single extra payment once every year is perhaps the simplest to track. If you can't afford to pay an additional whole payment in one month, you can divide that payment by 12 and pay that additional amount monthly. Finally, you can pay a half payment every two weeks. These options differ a little in lowering the final payback amount and shortening payback length, but they will all significantly reduce the duration of your mortgage and lower your total interest paid.
It may not be possible for you to pay extra every month or even every year. But it's important to note that most mortgages allow you to make additional principal payments at any time. Whenever you come into extra cash, consider using this provision to make an additional one-time payment toward mortgage principal. If, for example, you receive an unexpected windfall five years into your mortgage, investing a few thousand dollars into your mortgage principal will significantly shorten the duration of your loan and save enormously on mortgage interest paid over the duration of the mortgage loan. For most loans, even this small amount, paid early in the loan period, could offer huge savings in interest and in the duration of the loan.
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