Making consistent additional payments on the principal yields singificant savings. You can accomplish this in various ways. Making 1 additional full payment once every year may be the easiest to keep track of. If you can't pay an extra whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Another popular option is to pay a half payment every two weeks. The result is you will make one extra monthly payment in a year. 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 it's important to note that most mortgage contracts allow you to make additional principal payments at any time. Any time you come into extra cash, you can use this provision to make an additional one-time payment on your mortgage principal.
If, for example, you were to receive a large gift or tax refund just a few years into your mortgage, you could pay a portion of this windfall toward your mortgage loan principal, resulting in significant savings and a shorter payback period. Unless the loan is quite large, even a few thousand dollars applied early can produce huge savings over the duration of the loan.
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