Originally posted on Money with Merne’s Facebook Page on January 27, 2017:
So as of this month, we’ve owned our house for two years! But we’ve actually made FOUR years worth of principal payments! When we settled on the house, the mortgage broker advised if we double the principal payments in the amortization schedule, we’d pay off our house in half the time. If you’re not familiar with how an amortization schedule works, the monthly payment is the same every month but the principal and interest amounts always change, starting with a small principal amount and a large interest amount. At the end of the term, it’s all principal. Therefore, it’s easier to double the payments in the beginning of the mortgage. It started out at only $250/month of an $800+ loan. Through tax refunds, bonuses, extra paychecks we chipped away at our principal in addition to our monthly payment, shaving years (and lots of money in interest) off our mortgage! Even if you can’t double, any extra payments toward your principal will help save money in the long run!