There's a simple trick to significantly reduce the length of your mortgage and save thousands of dollars in interest: Make extra payments which are applied to your loan principal. Borrowers use different methods to meet this goal. Making 1 additional full payment once per year is likely the easiest to arrange. If you can't afford to pay an extra whole payment in one month, you can divide that payment by 12 and pay that additional amount monthly. Another popular option is to pay a half payment every two weeks. The result is you make one additional monthly payment in a year. These options differ slightly in reducing the total interest paid and reducing payback length, but they will all significantly shorten the length of your mortgage and lower your total interest paid.
Some borrowers can't manage extra payments. Keep in mind that most mortgages will allow you to make additional payments to your principal at any time. You can benefit from this rule to pay extra on your principal when you get some extra money.
Here's an example: a few years after buying your home, you get a very large tax refund,a large legacy, or a non-taxable cash gift; , paying several thousand dollars into your mortgage principal can reduce the repayment duration of your loan and save enormously on mortgage interest paid over the duration of the mortgage loan. For most loans, even a modest amount, paid early enough in the mortgage, could offer huge savings in interest and in the length of the loan.
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