Huge Savings on Interest: Available to Anyone with a Mortgage
Paying consistent extra payments toward the loan principal can yield big savings. People employ various techniques to meet this goal. Paying one additional payment one time per year is probably the easiest to keep track of. Of course, many people won't be able to pull off this huge extra expense, so dividing an additional payment into 12 additional monthly payments works too. Finally, you can commit to paying half of your mortgage payment every other week. These options differ a little in reducing the total interest paid and shortening payback length, but they will all significantly reduce the length of your mortgage and lower the total interest you will pay over the duration of the loan.
Additional One-time payment
It may not be possible for you to pay down your principal every month or even every year. Remember that most mortgages will permit you to pay extra on your principal at any time. Any time you get some extra cash, you can use this provision to make an additional one-time payment on your mortgage principal. Here's an example: several years after buying your home, you receive a huge tax refund,a large inheritance, or a non-taxable cash gift; , you could pay this money toward your loan principal, resulting in huge savings and a shorter loan period. Unless the mortgage loan is quite large, even a few thousand dollars applied early can produce huge benefits over the life of the loan.