Question:

Should I make an extra mortgage payment every once in a while?

Answer:

Every time you make an extra mortgage payment, you are helping your mortgage amortize faster and reducing the overall interest cost of the mortgage.

It is highly recommended that you make extra mortgage payments, if there is no prepayment penalty that your lender charges. Usually, you should be allowed to pay extra principal with your mortgage coupon.

Sending an extra 1/12th of the monthly mortgage each month or paying with a biweekly plan results in a very effective earlier amortization of the home loan, and shaves years off your mortgage term and tens of thousands of dollars in interest.

However, if you are planning on making extra mortgage payments on a regular basis, you will need to settle this with the lender. They might have requirements for a biweekly plan, or might require using a third party for the purpose. In any case, even if the lender charges a fee for accepting an early prepayment plan, you could set up an account where to put aside extra funds to be applied towards the mortgage payment. Thus, interest will accrue and will possibly offset lender's charges and penalty fees.

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