Here's a simple trick to significantly reduce the length of your mortgage and save thousands of dollars in interest: Make extra payments that go to your principal. You can pay against principal in many different ways. Making one additional full payment once every year may be the easiest to arrange. If you can't afford to pay an additional whole payment in one month, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Finally, you can pay a half payment every other week. These options differ a little in lowering the final payback amount and shortening payback length, 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 down your principal every month or even every year. But it's important to note that most mortgages allow additional payments at any time. You can take advantage of this rule to pay down your principal any time you come into extra money.
If, for example, you were to receive a large gift or tax refund three years into your mortgage, you could pay a portion of this windfall toward your mortgage loan principal, which would result in enormous savings and a shorter loan period. Unless the loan is quite large, even a few thousand dollars applied early in the loan period can yield huge savings over the duration of the loan.
Do you have a question regarding a mortgage program?