Making regular extra payments on the principal will provide singificant savings. You can accomplish this in various ways. Making a single extra payment one time a year is likely the easiest to arrange. Of course, some folks will not be able to pull off such an enormous extra payment, so dividing one additional payment into twelve additional monthly payments is a fine option too. Finally, you can commit to paying a half payment every two weeks. These options differ a little in lowering the final payback amount and reducing payback length, but each will significantly shorten the duration of your mortgage and lower your total interest paid.
Some folks just can't make extra payments. Remember that almost all mortgages will allow you to pay extra on your principal at any time. You can benefit from this rule to pay extra on your principal any time you come into extra money. Here's an example: five years after moving into your home, you get a very large tax refund,a very large inheritance, or a non-taxable cash gift; , investing several thousand dollars into your home's principal will shorten the repayment duration of your loan and save enormously on mortgage interest paid over the duration of the mortgage loan. Unless the loan is quite large, even a few thousand dollars applied early can produce huge savings over the duration of the loan.
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