The method for cutting a mortise into a fence post is common to a mortise of any size for any type of fence rail board.
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Lay out the desired location of the mortise opening on the side of the fence post. Use a hand square to connect the lines to form a square outline for the mortise hole.
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Cut the perimeter line of the mortise using a wood chisel. Place the flat side of the chisel tip on the line and tap the chisel with a hammer or wood mallet. Repeat the action until the full perimeter of the mortise has been scored.
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Chip out the interior area of the mortise outline, cutting toward the inside and pivoting the chisel to remove the wood chips. Chip out a minimum of 1-inch and a maximum 2-inch depth for proper fence rail support.
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Repeat Steps 1 through 3 to complete the mortising of all the fence posts, as needed.