Paying regular additional payments on your loan principal can yield big savings. Borrowers can pay extra on principal in many different ways. Making a single extra full payment one time every year may be the simplest to arrange. If you can't afford to pay an additional whole payment in one month, you can divide that payment by 12 and pay that additional amount monthly. Finally, you can commit to paying half of your mortgage payment every other week. These options differ slightly in reducing the final payback amount and shortening payback length, but they will all significantly shorten the length of your mortgage and lower your total interest paid.
It may not be possible for you to pay down your principal every month or even every year. Keep in mind that virtually all mortgage contracts will allow you to pay extra on your principal at any point during repayment. You can take advantage of this provision to pay down your principal when you get some extra money. If, for example, you were to receive a surprise windfall three years into your mortgage, investing a few thousand dollars into your home's principal will reduce the duration of your loan and save a huge amount on interest over the life of the loan. Unless the mortgage loan is quite large, even modest amounts applied early in the loan period can yield huge savings over the life of the loan.
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