Here's a simple trick to significantly reduce the length of your mortgage and save you thousands in interest: Make additional payments which are applied to the principal. People use different methods to meet this goal. Paying 1 extra full payment one time a year is likely the simplest to keep track of. If you can't afford to pay an extra whole payment all at once, you can divide that payment by 12 and write a check for that additional amount monthly. Another very popular option is to pay a half payment every two weeks. The effect here is that you will make one additional monthly payment every year. These options differ a little in reducing the final payback amount and shortening payback length, but each will significantly reduce the length of your mortgage and lower the total interest you will pay over the duration of the loan.
Lump-sum Additional Payment
It may not be possible for you to pay more every month or even every year. Remember that virtually all mortgages will permit you to pay extra on your principal at any point during repayment. You can benefit from this rule to pay extra on your principal any time you come into extra money.
For example: several years after buying your home, you receive a huge tax refund,a large inheritance, or a non-taxable cash gift; , you could apply a portion of this money toward your mortgage loan principal, which would result in significant savings and a shortened payback period. Unless the loan is quite large, even small amounts applied early in the loan period can yield huge benefits over the life of the loan.