There's a trick to significantly reduce the length of your mortgage and save thousands in interest: Make additional payments that apply to the loan principal. Borrowers can pay more on principal in various ways. Making a single additional payment one time every year is likely the simplest to track. If you can't pay an extra whole payment in one month, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Another very popular option is to pay half of your payment every other week. The effect here is that you will make one extra monthly payment in a year. These options differ slightly in lowering the final payback amount and shortening payback length, but each will significantly reduce the duration of your mortgage and lower your total interest paid.
Some folks just can't make extra payments. But remember that most mortgage contracts allow you to make additional payments at any time. You can take advantage of this rule to pay down your principal when you come into extra money.
Here's an example: a few years after moving into your home, you receive a larger than expected tax refund,a very large legacy, or a cash gift; , you could apply this money toward your mortgage loan principal, resulting in significant savings and a shorter payback period. For most loans, even this relatively small amount, paid early enough in the loan period, could offer huge savings in interest and duration of the loan.
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