There's a simple trick to reduce the repayment period of your mortgage and save you thousands over the course of your loan: Make additional payments which apply toward the principal. People accomplish this goal in several different ways. Paying 1 extra full payment once a year is perhaps the easiest to track. If you can't afford to pay an additional whole payment all at once, you can divide your payment by 12 and pay that additional amount monthly. Another very popular option is to pay a half payment every two weeks. The effect here is that you will make one additional monthly payment in a year. These options differ slightly in lowering the total interest paid and reducing payback length, but each will significantly shorten the duration of your mortgage and lower the total interest paid over the duration of the loan.
It may not be possible for you to pay more every month or even every year. But you should remember that most mortgages will allow additional payments at any time. You can take advantage of this rule to pay down your principal when you come into extra money.
If, for example, you were to receive a large gift or tax refund five years into your mortgage, you could apply this money toward your loan principal, which would result in enormous savings and a shortened payback period. For most loans, even a modest amount, paid early enough in the loan period, could offer big savings in interest and duration of the loan.
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