Making consistent additional payments on the principal can yield huge savings. People employ various techniques to meet this goal. For many people,Perhaps the simplest way to keep track is to make 1 extra mortgage payment every year. If you can't pay an additional whole payment all at once, you can divide that payment by 12 and write a check for that additional amount monthly. Another option is to pay a half payment every two weeks. The result is you make one additional monthly payment each year. Each of these options produces slightly different results, but they will all significantly reduce the duration of your mortgage and lower the total interest you will pay over the life of the loan.
It may not be possible for you to pay down your principal every month or even every year. Keep in mind that virtually all mortgage contracts will allow you to make additional payments to your principal at any point during repayment. Any time you come into extra cash, you can use this rule to make a one-time additional payment on your mortgage principal. If, for example, you receive a very large gift or tax refund four years into your mortgage, paying several thousand dollars into your home's principal will reduce the duration of your loan and save a huge amount on interest over the duration of the mortgage loan. For most loans, even this relatively modest amount, paid early enough in the mortgage, could offer big savings in interest and length of the loan.
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