This may seem crazy coming from a mortgage guy, but I’m super excited about my newest goal: paying off my mortgage.
While there’s no doubt that a mortgage is great for purchasing a home or consolidating debts, I also know it is not something I want as a permanent fixture in my life.
You can dramatically cut years off the length of your loan by paying extra toward the principal on it. I have extra money deducted automatically to avoid making a monthly decision about it. I see it as a “forced savings plan.” Plus, it gives me a sense of liberation to know I am not on an eternal rat wheel.
I encourage you to grab a pen and paper, draft a budget, pay off all consumer debt, and then devise a plan to pay off your home in 15 years or less. It does not require as much as you might think to do this. Below is a scenario where by paying an additional $300 a month on a $100,000 mortgage loan, a homeowner could shave 16 years off the life of his or her mortgage, ultimately saving more than $44,000.
| Loan Amount | Interest Rate | Monthly Mortgage Payment | Extra Payment | Total Monthly Payment | Years to Pay Off Loan | Total Paid | Total Saved |
| $100,000 | 4.25% | $491.94 | $0 | $491.94 | 30 | $177,098.40 | $0 |
| $100,000 | 4.25% | $491.94 | $300 | $791.94 | 14 | $132,783.53 | $44,314.87 |
*The following example does not include taxes and insurance. It is based strictly off the loan amount.
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