Making regular extra payments on your loan principal provides enormous returns. You can pay more on principal in many different ways. Paying one additional full payment one time every year is likely the easiest to arrange. But some people can't swing this huge additional payment, so dividing one extra payment into 12 additional monthly payments is a fine option too. Finally, you can commit to paying a half payment every other week. 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 your total interest paid.
It may not be possible for you to pay more every month or even every year. But you should remember that most mortgages will allow additional principal payments at any time. Any time you get some unexpected money, consider using this provision to make a one-time additional payment on your mortgage principal.
If, for example, you were to receive an unexpected windfall five years into your mortgage, you could pay this windfall toward your loan principal, which would result in significant savings and a shorter loan period. Unless the loan is very large, even a few thousand dollars applied early in the loan period can produce huge savings over the life of the loan.
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