There's a trick to reduce the repayment period of your mortgage and save thousands in interest: Make extra payments which are applied toward the principal. Borrowers pay extra in several ways. Making one additional full payment once a year is perhaps the simplest to track. If you can't afford to pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Another popular option is to pay a half payment every two weeks. The effect here is that you will make one extra monthly payment every year. Each option produces slightly different results, but each will significantly reduce the duration of your mortgage and lower the total interest paid over the duration of the loan.
Some folks can't manage any extra payments. But it's important to note that most mortgages will allow you to make additional payments at any time. You can benefit from this rule to pay down your mortgage principal when you come into extra money.
For example: five years after moving into your home, you receive a very large tax refund,a very large legacy, or a non-taxable cash gift; , investing a few thousand dollars into your mortgage principal will significantly reduce the repayment duration of your loan and save enormously on mortgage interest paid over the duration of the loan. Unless the loan is quite large, even modest amounts applied early in the loan period can produce huge benefits over the life of the loan.