That is my goal and where my focus has been for the past two years. I have written before about the advantages of clients increasing their monthly mortgage payments by even $50.00 a payment, to help them pay off the debt as fast as they can – but I feel that sometime people need to see the numbers.
My husband and I have a current mortgage of $166,000 as of December 2010, plus a Home Equity Line of Credit. Currently we have been focused on paying off the Home Equity Line of Credit, while I have been slowing increasing our Mortgage Payments almost monthly. Often I have increased the bi-weekly payment by just $40.00, just waiting to see if my husband will notice.
As of today, he has not even noticed that our payments are $200.00 more bi-weekly then they were last year. My husband is a very smart man, but we have been increasing our “savings pot” in our joint account where all of our bills are debited. All HST rebates, our grading deposit, and any extra income I bring in, goes into our joint account.
So here are the numbers:
December 31, 2010
Principle Balance $166,000
Principle & Interest Payment $400 biweekly
Total of all Principle & Interest $34,783.12
Total Cost of Borrowing (Interest) $19,631.94
Balance at Maturity $150,688.50
Amortization Period 24 Years and 4 Weeks
May 1, 2011
Principle Balance $164,359.73
Principle & Interest Payment $500 biweekly
Total of all Principle & Interest $38,815.87
Total Cost of Borrowing (Interest) $16,900.75
Balance at Maturity $142,444.61
Amortization Period 17 Years and 1 Week
By increasing our payments by only $100.00 – I took 7 years off my Mortgage. 7 YEARS!!!! I also saved $3,000 in interest over the remainder of the term.
If you are serious about living debt free it is very easy to make small increases on your mortgage, without breaking the bank.
Review your finances, and see if you have an extra $100.00 per month to spend on your debt repayment. It will pay you more equity into your future!
“These opinions are entirely my own and do not represent TD's position, strategies or opinions".
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