There's a simple trick to reduce the repayment period of your mortgage and save thousands of dollars over the course of your loan: Make additional payments which go to your loan principal. Borrowers can accomplish this using a few different techniques. Paying one additional payment once every year is likely the easiest to arrange. If you can't afford to pay an extra whole payment all at once, 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 each year. Each of these options produces different results, but each will significantly shorten the length of your mortgage and lower the total interest you will pay over the duration of the loan.
Some people just can't make any extra payments. Remember that virtually all mortgage contracts will allow you to make additional payments to your principal at any time. Whenever you come into extra cash, consider using this rule to make an additional one-time payment on your mortgage principal. If, for example, you were to receive a very large gift or tax refund three years into your mortgage, investing a few thousand dollars into your home's principal will significantly shorten the repayment duration of your loan and save a huge amount on mortgage interest over the duration of the loan. For most loans, even this small amount, paid early in the mortgage, could offer huge savings in interest and in the duration of the loan.
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