Here's a simple trick to reduce the repayment period of your mortgage and save thousands of dollars in interest: Make additional payments which apply toward the principal. People use different methods to accomplish this goal. For many people,Perhaps the easiest way to organize this process is by making 1 additional mortgage payment every year. If you can't pay an extra whole payment in one month, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Another very popular option is to pay half of your payment every two weeks. The result is you make one additional monthly payment in a 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 paid over the life of the loan.
Some people just can't make extra payments. Remember that almost all mortgages will allow you to pay extra on your principal at any point during repayment. Whenever you come into unexpected money, you can use this rule to make a one-time additional payment on your principal. If, for example, you were to receive a surprise windfall five years into your mortgage, paying a few thousand dollars into your home's principal can significantly shorten the repayment period of your loan and save a huge amount on mortgage interest paid over the duration of the loan. Unless the loan is quite large, even small amounts applied early can yield huge benefits over the duration of the loan.
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