Additional Payments Provide Big Mortgage Savings

Paying regular extra payments toward your loan principal can yield enormous returns. People employ various techniques to meet this goal. For many people,Perhaps the easiest way to keep track is to make 1 additional mortgage payment per year. But some people won't be able to afford such a large extra payment, so splitting a single extra payment into twelve extra monthly payments is a fine option too. Finally, you can commit to paying half of your mortgage payment every other week. Each of these options yields different results, but each will significantly reduce the duration of your mortgage and lower your total interest paid.

Additional One-time payment

Some borrowers can't manage extra payments. But you should remember that most mortgage contracts allow you to make additional principal payments at any time. Any time you come into unexpected cash, consider using this rule to make an additional one-time payment on mortgage principal.

If, for example, you were to receive a large gift or tax refund four years into your mortgage, paying several thousand dollars into your home's principal will shorten the repayment period of your loan and save a huge amount on mortgage interest paid over the duration of the loan. For most loans, even a small amount, paid early in the mortgage, could offer huge savings in interest and in the duration of the loan.