Here's a simple trick to reduce the repayment period of your mortgage and save thousands in interest: Make additional payments that are applied toward the loan principal. Borrowers can pay against principal in many different ways. Paying a single extra full payment one time per year is probably the easiest to keep track of. But many people won't be able to swing such a large extra payment, so dividing one additional payment into twelve extra monthly payments is a great option too. Finally, you can pay half of your mortgage payment every two weeks. These options differ a little in reducing the final payback amount and shortening payback length, but they will all significantly reduce the duration of your mortgage and lower the total interest paid over the duration of the loan.
Some people just can't make extra payments. But it's important to note that most mortgage contracts allow you to make additional payments at any time. Any time you get some unexpected cash, you can use this rule to make an additional one-time payment on principal. If, for example, you were to receive a large gift or tax refund four years into your mortgage, investing a few thousand dollars into your mortgage principal will significantly shorten the duration of your loan and save a huge amount on interest over the duration of the mortgage loan. For most loans, even this relatively modest amount, paid early enough in the mortgage, could offer huge savings in interest and in the length of the loan.
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