Paying consistent extra payments on your loan principal will provide huge returns. Borrowers pay extra in several ways. For many people,Perhaps the simplest way to keep track is to make 1 extra mortgage payment per year. If you can't pay an extra whole payment all at once, you can divide that payment by 12 and pay that additional amount monthly. Finally, you can pay a half payment every other week. Each of these options produces slightly different results, but each will significantly shorten the length of your mortgage and lower your total interest paid.
It may not be possible for you to pay more every month or even every year. But you should remember that most mortgages allow you to make additional payments at any time. Any time you get some unexpected cash, you can use this rule to make a one-time additional payment on principal. Here's an example: several years after buying your home, you receive a larger than expected tax refund,a large legacy, or a non-taxable cash gift; , paying a few thousand dollars into your mortgage principal can significantly shorten the duration of your loan and save a huge amount on mortgage interest paid over the duration of the mortgage loan. Unless the mortgage loan is very large, even a few thousand dollars applied early in the loan period can yield huge savings over the duration of the loan.
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