Paying regular extra payments on the loan principal will yield singificant savings. Borrowers use different methods to meet this goal. Paying a single additional full payment one time per year is perhaps the simplest to keep track of. Of course, many folks can't pull off such an enormous extra expense, so dividing a single additional payment into twelve extra monthly payments works too. Finally, you can pay a half payment every two weeks. Each option produces different results, but each will significantly shorten the length 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. Remember that virtually all mortgages will permit you to make additional payments to your principal at any point during repayment. Any time you get some unexpected money, consider using this rule to make a one-time additional payment on your mortgage principal. If, for example, you receive a large gift or tax refund just a few years into your mortgage, you could pay this windfall toward your loan principal, resulting in significant savings and a shorter payback period. For most loans, even this relatively modest amount, paid early in the mortgage, could offer big savings in interest and duration of the loan.
Do you have a question regarding a mortgage program?