Making regular additional payments on the principal balance will yield singificant savings. Borrowers can pay extra on principal by employing various techniques. For many people,Perhaps the simplest way to keep track is to make one additional mortgage payment a year. If you can't pay an extra whole payment in one month, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Another very popular option is to pay half of your payment every other week. The effect here is that you will make one additional monthly payment every year. Each option yields slightly different results, but each will significantly shorten the duration of your mortgage and lower the total interest paid over the life of the loan.
It may not be possible for you to pay down your principal every month or even every year. 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 rule to pay down your mortgage principal any time you come into extra money.
If, for example, you were to receive an unexpected windfall five years into your mortgage, paying a few thousand dollars into your mortgage principal can significantly reduce the repayment period of your loan and save enormously on interest over the duration of the mortgage loan. For most loans, even this relatively modest amount, paid early in the loan period, could offer huge savings in interest and duration of the loan.
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