Making consistent extra payments toward the principal balance will yield singificant savings. Borrowers pay more on principal by employing various techniques. Paying a single extra payment one time every year may be the easiest to track. If you can't afford to pay an additional whole payment in one month, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Finally, you can pay a half payment every other week. Each option produces different results, but each will significantly reduce the length of your mortgage and lower the total interest you will pay over the life of the loan.
It may not be possible for you to pay extra every month or even every year. But you should remember that most mortgage contracts allow additional principal payments at any time. You can benefit from this rule to pay extra on your mortgage principal when you get some extra money. If, for example, you were to receive a very large gift or tax refund just a few years into your mortgage, you could apply a portion of this windfall toward your mortgage loan principal, which would result in enormous savings and a shorter payback period. For most loans, even this relatively small amount, paid early in the mortgage, could offer huge savings in interest and duration of the loan.
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