Paying consistent additional payments on the principal will provide big returns. Borrowers make this happen in a few ways. Paying one additional payment once a year is perhaps the simplest to track. Of course, some folks won't be able to pull off such a large extra expense, so splitting one extra payment into 12 extra monthly payments works as well. Another popular option is to pay a half payment every two weeks. The effect here is that you will make one extra monthly payment in a year. These options differ a little in lowering the total interest paid and reducing payback length, but they will all significantly reduce the length of your mortgage and lower the total interest you will pay over the duration of the loan.
Some people can't manage extra payments. Remember that virtually all mortgages will permit you to make additional payments to your principal at any point during repayment. You can benefit from this rule to pay down your principal when you come into extra money. If, for example, you were to receive a very large gift or tax refund five years into your mortgage, you could apply a portion of this windfall toward your loan principal, resulting in huge savings and a shorter loan period. Unless the loan is quite large, even a few thousand dollars applied early can produce huge savings over the duration of the loan.
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