Making additional payments towards your mortgage can be a great idea as it can save you thousands over the course of the loan as well as shave off years on your loan term. It is recommended that you do this on your own rather than enrolling in an accelerated payment plan as those can cost hundreds of dollars.
Here are some great ways to pay down your mortgage earlier than anticipated.
Increase your monthly payment by 1/12th
The extra money that you are paying towards your balance is applied to the principal. The principal is the actual amount that you owe without interest. The majority of the payments that you make early in the mortgage term are primarily interest so paying down the principal will save you a lot in the years ahead.
One extra annual payment
This can be easier if you get a yearly bonus or get a nice tax refund. Take these funds and apply them to the next mortgage payment towards the principal. This will also help cut down the principal so you will be ahead of schedule.
Pay half of your regular payment every two weeks
Some lenders will allow you to do this for free, some will require that you enroll in a plan for a charge. Alternatively you can self manage this in your own accounts. Try transferring these payments from checking to savings accounts, then the total amount to your lender when payment is due.
By the end of the year, you will have made 26 half payments which equates to 13 full payments or 1 extra per year. For an example of the potential savings, a $200,000 30-year loan with one extra payment per year will shorten it to 26 years with a savings of over $32,000 in interest.