Biweekly Payments

• When you first get a mortgage, ask your lender about the option to pay every two weeks rather than every month. This one change to your mortgage plan can save you thousands of dollars over the life of your mortgage. By paying half of each month's debt in the middle of the month rather than at the end, you are eliminating the total length of your debt in many small increments, and removing a corresponding amount of interest on that debt.
  
  

Payment Increases

• If your find yourself in a more solid financial position at some point during the life of your mortgage, advance your amortization date by increasing your monthly payments. Different mortgage plans have different rules regarding this. One example is a "20/20 plan," which allows you to increase your monthly payments by up to 20 percent and prepay up to 20 percent of your original loan each calendar year. If you can afford it, increasing your monthly payments will save you thousands of dollars in interest. The sooner you can do it, the more money you will save.
  
  

Prepayments

• A prepayment is a payment that you make to the bank in a lump sum, independent of your monthly payments. The advantage of a prepayment is that 100 percent of it is applied to the principal on your mortgage. Making a prepayment reduces your loan and means that a higher percentage of each succeeding monthly payment goes toward bringing down the principal rather than servicing the interest charges. Prepayments are difficult for people who are financially tight, but if you can manage one or more in the early years of your mortgage, you will have greater financial freedom in the future.
  
  

Interest

• The interest rate on your mortgage is one of the determining factors in how much you will end up paying for your home and how long it will take you to pay it off. To some extent, interest rates are determined by market conditions at the time that you purchase a house. Within the limitations of the market, doing research and shopping around will allow you to discover what your best interest rate can be. A difference of even half a percentage point can add up to thousands of dollars over the 20- or 30-year life of a mortgage.