Making consistent extra payments toward the principal balance yields huge returns. Borrowers can do this in various ways. Paying 1 additional payment one time per year may be the easiest to track. If you can't pay an additional whole payment all at once, you can divide your payment by 12 and pay that additional amount monthly. Another very popular option is to pay a half payment every other week. The result is you make one extra monthly payment in a year. Each of these options yields slightly different results, 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. Keep in mind that virtually all mortgage contracts will allow you to pay extra on your principal at any point during repayment. You can benefit from this provision to pay extra on your mortgage principal any time you get some extra money. Here's an example: a few years after buying your home, you get a very large tax refund,a very large inheritance, or a cash gift; , you could pay a portion of this windfall toward your mortgage loan principal, resulting in significant savings and a shortened payback period. Unless the mortgage loan is quite large, even a few thousand dollars applied early can produce huge savings over the life of the loan.
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