Here's a simple trick to significantly reduce the length of your mortgage and save thousands over the course of your loan: Make extra payments which apply toward your loan principal. People accomplish this goal in several different ways. Paying a single extra payment once per year is perhaps the easiest to track. 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. Finally, you can commit to paying a half payment every other week. Each option produces different results, but they will all significantly shorten the length of your mortgage and lower the total interest you will pay over the life of the loan.
Some people just can't make extra payments. Keep in mind that almost all mortgage contracts will allow you to pay extra on your principal at any time. You can take advantage of this rule to pay extra on your mortgage principal any time you come into extra money.
If, for example, you receive an unexpected windfall five years into your mortgage, you could pay a portion of this windfall toward your loan principal, resulting in huge savings and a shortened payback period. For most loans, even a modest amount, paid early in the loan period, could offer big savings in interest and in the duration of the loan.
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