Making regular extra payments on your principal balance will provide enormous returns. People employ various techniques to meet this goal. Making a single additional payment one time per year is perhaps the simplest to arrange. However, many people won't be able to swing such a large additional expense, so dividing an additional payment into 12 additional monthly payments works as well. Another very popular option is to pay half of your payment every two weeks. The effect here is that you make one extra monthly payment each year. These options differ slightly in lowering the total interest paid and shortening payback length, but each will significantly shorten the duration of your mortgage and lower the total interest paid over the life of the loan.
Some people can't manage any extra payments. But you should remember that most mortgage contracts allow additional principal payments at any time. Any time you come into extra money, you can use this provision to make a one-time additional payment toward mortgage principal.
If, for example, you were to receive a surprise windfall five years into your mortgage, paying a few thousand dollars into your home's principal can significantly reduce the repayment period of your loan and save a huge amount on mortgage interest paid over the life of the loan. Unless the mortgage loan is very large, even modest amounts applied early in the loan period can produce huge savings over the life of the loan.
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