There's a trick to significantly reduce the length of your mortgage and save you thousands over the course of your loan: Make extra payments that apply toward your loan principal. You can accomplish this in several ways. For many people,Perhaps the easiest way to organize this process is to make 1 additional payment per year. If you can't pay an extra whole payment in one month, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Finally, you can pay half of your mortgage payment every other week. These options differ a little in lowering the total interest paid and reducing payback length, but each will significantly reduce the duration of your mortgage and lower your total interest paid.
It may not be possible for you to pay extra every month or even every year. But it's important to note that most mortgages will allow additional payments at any time. Any time you come into unexpected money, you can use this rule to make an additional one-time payment on principal.
If, for example, you were to receive an unexpected windfall three years into your mortgage, you could pay a portion of this money toward your loan principal, which would result in huge savings and a shorter loan period. For most loans, even this small amount, paid early in the mortgage, could offer big savings in interest and in the duration of the loan.
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