Huge Savings on Interest: Available to Anyone with a Mortgage

Paying consistent extra payments on the loan principal will provide singificant savings. Borrowers can do this using a few different techniques. Making a single additional full payment one time per year is perhaps the simplest to keep track of. But many people can't swing this huge extra expense, so splitting one additional payment into twelve extra monthly payments works as well. Another option is to pay a half payment every other week. The result is you will make one additional monthly payment in a year. Each of these options produces slightly 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 any extra payments. But you should remember that most mortgage contracts will allow additional payments at any time. Whenever you come into unexpected cash, consider using this rule to make a one-time additional payment toward your principal.

If, for example, you receive an unexpected windfall three years into your mortgage, paying a few thousand dollars into your home's principal can significantly shorten the duration of your loan and save enormously on mortgage interest paid over the life of the loan. For most loans, even this small amount, paid early enough in the loan period, could offer big savings in interest and length of the loan.

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