Last year my wife and I purchased a new home and our mortgage was $210,000 and was amortized over 25 years. Our monthly payments were $1,236.36.

First:
After negotiating the mortgage, I called the bank and asked if I could make weekly payments of $309.84 (1/4 of the monthly payment). This accelerated my mortgage payments and reduced the interest I would pay over the life of my mortgage because I was effectively making an additional monthly payment per year and reduced my amortization by 3.6 years. I also saved $27,100 in interest.

Second:
Last year in January, I received a bonus of $1,600 that I immediately applied to the mortgage and this cut off another 15 weeks off my mortgage and saved me about $3,100 in interest.

Third:
In June of this year I received a 5.3% pay raise and I called my bank and asked to increase my payment accordingly. The new weekly payment is now $325 and this shaved off another 1.5 years and saved me a further $10,000 in interest expense.

Fourth:
This month I received a promotion and received a further 6% raise and again called my bank and asked that the payments be increased to $346 per week. This saved me a further $11,100 of interest and reduced my term by another 1.7 years.

At this point if I don't make any further adjustments or principal payments my mortgage would have been paid off in just under 18 years.

Finally:
I plan on increasing my mortgage payments by the same percentage as my annual raises which normally occur in June. If I assume I get a 3% raise per year, keeping my interest rate constant, I project that the total term of my mortgage would be 14.5 years and I would have saved a grand total of $67,500 in interest.

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Personal Money Tips Blog at http://blog.personal-money-tips.com/

Sounds like you have everything figured out...Nice job!

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New graduate with an emphasis in debt counseling.

toptaxguy is right on the money!

Every dollar you pay towards principal on the front end of the mortgage saves about $2 in interest on the back end.

There are some financial advisors who aren't very good with math that would say oh no no no you'll do better investing that money in the market.

The Dow was 13,043.96 on Jan 2nd 2008 today July 14th 2008 it's 11,055.19.

Down 1,988.77 points.

That's a loss of 15.24% this year.

But don't worry the market will come back E - V - E - N - T - U - A - L - L -Y.

How long is eventually?

topaxguy has a plan, is working the plan and in a few short years will own his home free and clear.

More later wait till you see how the math works out on a paid off home!

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Gary Spicuzza, *SAFE
Copyright 1956
No Rights Reserved
*Self Appointed Financial Expert

This is one of my favorite topics because one of the biggest keys to becoming financially sound is paying off the mortgage.

Toptaxguy stated his original monthly mortgage payment was $1,236.36.

How much cash would someone have to have earning a guaranteed 5% interest to equal the mortgage payment?

The answer is $296,726 dollars.

That's the dollar value equivalent of NOT having to make a mortgage payment.

Most people would be quite pleased with themselves if they had $296,726 cash.

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Gary Spicuzza, *SAFE
Copyright 1956
No Rights Reserved
*Self Appointed Financial Expert