Paying consistent extra payments toward your loan principal will yield huge returns. Borrowers employ various techniques to accomplish this goal. Making 1 extra payment one time per year is perhaps the simplest to keep track of. Of course, many folks can't swing such an enormous extra payment, so dividing an extra payment into 12 extra monthly payments works too. Another option is to pay half of your payment every other week. The effect here is that you make one additional monthly payment every year. These options differ a little in reducing the total interest paid and shortening payback length, but each will significantly shorten the duration of your mortgage and lower the total interest you will pay over the life of the loan.
Some folks can't manage any extra payments. Keep in mind that virtually all mortgages will allow you to pay extra on your principal at any time. You can take advantage of this provision to pay extra on your principal when you get some extra money.
If, for example, you receive a surprise windfall four years into your mortgage, investing several thousand dollars into your mortgage principal will shorten the repayment duration of your loan and save a huge amount on interest over the duration of the mortgage loan. Unless the loan is very large, even small amounts applied early in the loan period can produce huge savings over the duration of the loan.
Do you have a question regarding a mortgage program?