Mortgage Update May 2008
I thought that since I promoted a method of paying down my mortgage faster I should give regular updates on my progress.
I took out a $210,000, year mortgage amortized over 25 years at 5.15% back in December 2006. The monthly payments are $1,239.36. The mortgage would be paid off by December 2031.
When I negotiated the mortgage with my bank, I asked to make weekly payments of $309.84 ($1,239.36 / 4) to accelerate my principal payments. The change from monthly to weekly payments changed my pay off date from December 2031 to August 2028. This reduced my payoff date by 3 years and 5 months and saved me $27,000 in interest.
I made a lump sum payment of $1,600 on December 10, 2007 reducing the term by 3.5 more months and saving me $3,088 in interest.
My Mortgage Balance
Since inception we haven’t made any other changes to our mortgage other than make the regular weekly payments and our balance as of May 31, 2008 (according to my bank statement) is $199,781.
Changing My Mortgage Payments
From my prior post you’ll see that I’ve been entertaining some offers at the office. I had a performance review for my current role and received a raise of 5.3% and I’m calling the bank tomorrow to ask them to increase my weekly mortgage payments by 5.3%!
This will save me another $10,000 in interest and shortens the term by another 79 weeks. The total term of the mortgage is now down to 19.6 years and should be paid off by June 2026.
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Kudos on your strategies. Since you are shaving years of the back of your mortgage, you still can take advantage of the interest deductions during these early years.
Changing to weekly payments is a great idea but giving the mortgage payment a raise is excllent. Its probably better than periodic lump sum payments.