Paying consistent extra payments on your principal balance will provide big returns. Borrowers pay more on principal in many different ways. For many people,Perhaps the easiest way to organize this process is by making one extra payment per year. If you can't pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Another very popular option is to pay a half payment every other week. The effect here is that you make one extra monthly payment every year. These options differ slightly in reducing the final payback amount and reducing payback length, but they will all significantly shorten the length of your mortgage and lower your total interest paid.
It may not be possible for you to pay down your principal every month or even every year. But it's important to note that most mortgages will allow you to make additional payments at any time. Any time you get some unexpected cash, you can use this provision to make a one-time additional payment toward your principal.
If, for example, you receive a large gift or tax refund three years into your mortgage, you could apply a portion of this windfall toward your loan principal, resulting in enormous savings and a shortened loan period. For most loans, even a modest amount, paid early in the mortgage, could offer big savings in interest and duration of the loan.
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