Making consistent extra payments on your principal will yield huge returns. Borrowers pay against principal by employing various techniques. Paying 1 extra full payment once per year is probably the simplest to track. However, many people can't pull off such a large extra expense, so dividing one additional payment into twelve extra monthly payments works too. Another very popular option is to pay a half payment every two weeks. The result is you make one additional monthly payment each year. These options differ a little in lowering the total interest paid and reducing payback length, but they will all 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. Remember that most mortgage contracts will permit you to pay extra on your principal at any point during repayment. You can benefit from this rule to pay down your principal when you get some extra money. If, for example, you receive a very large gift or tax refund just a few years into your mortgage, you could pay this windfall toward your mortgage loan principal, which would result in enormous savings and a shorter payback period. For most loans, even a modest amount, paid early enough in the mortgage, could offer huge savings in interest and length of the loan.
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