Huge Savings on Interest: Available to Anyone with a Mortgage
Paying consistent extra payments on your loan principal will provide huge savings. Borrowers use different methods to accomplish this goal. Making 1 additional payment once per year may be the easiest to track. If you can't afford to pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Finally, you can pay half of your mortgage payment every two weeks. These options differ slightly in lowering the final payback amount 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.
Lump Sum Extra Payment
Some folks just can't make any extra payments. Remember that most mortgage contracts will permit you to make additional payments to your principal at any point during repayment. You can benefit from this provision to pay extra on your principal when you come into extra money.
If, for example, you were to receive a very large gift or tax refund four years into your mortgage, you could pay a portion of this windfall toward your loan principal, resulting in significant savings and a shortened payback period. Unless the loan is very large, even modest amounts applied early in the loan period can yield huge benefits over the duration of the loan.