Extra Payments Provide Huge Mortgage Savings
Making consistent additional payments on the principal yields huge savings. People make this happen in a few ways. For many people,Perhaps the simplest way to keep track is by making one additional payment every year. Of course, many folks will not be able to pull off such a large extra payment, so dividing an extra payment into 12 additional monthly payments works as well. Another option is to pay a half payment every two weeks. The result is you will make one extra monthly payment every year. These options differ slightly in reducing the final payback amount and shortening payback length, but they will all significantly reduce the length of your mortgage and lower the total interest you will pay over the life of the loan.
Additional One-time payment
Some folks can't manage extra payments. But you should remember that most mortgages will allow additional principal payments at any time. You can benefit from this provision to pay down your principal any time you get some extra money.
If, for example, you receive a surprise windfall just a few years into your mortgage, paying a few thousand dollars into your mortgage principal can reduce the repayment duration of your loan and save enormously on interest paid over the duration of the loan. For most loans, even this relatively small amount, paid early enough in the mortgage, could offer huge savings in interest and duration of the loan.