Additional Payments Yield Big Mortgage Savings

Making regular additional payments on the principal balance will yield huge savings. You can accomplish this using a few different techniques. For many people,Perhaps the simplest way to keep track is to make 1 additional mortgage payment per year. However, many people can't pull off such an enormous extra expense, so splitting one extra payment into 12 extra monthly payments works as well. Another very popular option is to pay half of your payment every other week. The effect here is that you will make one extra monthly payment in a year. These options differ a little in lowering the total interest paid and reducing payback length, but each will significantly shorten the length of your mortgage and lower your total interest paid.

Additional One-time payment

It may not be possible for you to pay extra every month or even every year. But remember that most mortgage contracts allow you to make additional principal payments at any time. 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 surprise windfall just a few years into your mortgage, you could pay this windfall toward your loan principal, resulting in significant savings and a shortened payback period. Unless the loan is quite large, even modest amounts applied early in the loan period can yield huge benefits over the duration of the loan.