There's a simple trick to significantly reduce the length of your mortgage and save you thousands over the course of your loan: Make extra payments which are applied toward your loan principal. Borrowers pay extra in a few ways. Making 1 additional payment once a year is perhaps the simplest to track. If you can't pay an additional whole payment in one month, you can divide that payment by 12 and pay that additional amount monthly. Finally, you can commit to paying a half payment every other week. These options differ a little in reducing the total interest paid and reducing payback length, but they will all significantly reduce the length of your mortgage and lower the total interest paid over the duration of the loan.
Some borrowers can't manage any extra payments. Keep in mind that virtually all mortgage contracts will permit you to make additional payments to your principal at any time. You can take advantage of this rule to pay down your mortgage principal when you get some extra money. Here's an example: several years after moving into your home, you get a larger than expected tax refund,a large legacy, or a cash gift; , paying a few thousand dollars into your home's principal can shorten the repayment duration of your loan and save enormously on interest over the duration of the loan. Unless the loan is quite large, even modest amounts applied early can yield huge benefits over the duration of the loan.
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