The value of extra mortgage payments

Just a quick post on this beautiful Thursday morning!

Let’s take a look at my months of pre-payments:

  1. July: I made about $14,700 in extra payments, which is about 12x the normal payment and shaved off 28 regular monthly payments.
  2. August: I made about $1,700 in extra payments, which is about 1.4x the normal payment and shaved off 3 regular monthly payments.
  3. September: I will make about $2,100 in extra payments, which is about 1.8x the normal payment and will shave off 4 regular monthly payments.

I finally realized today that I’m making 1.8x in extra payments, but shaving off 4 regular monthly payments, meaning that I’ll be spending less than half the dollar amount necessary for all of these pre-payments I’m making. Now that is pretty powerful!

I am going to kill this mortgage!

8 thoughts on “The value of extra mortgage payments

  1. Very nice!! July Must have been a great month for you. I’d love to pay down that much of my Mortgage.. However, I can never decide which is better to full fund my 401K, and Roth IRA to their max or to divert some of that into the Mortgage acceleration. I don’t have enough to do both. The Mortgage payments are a sure thing and the market is a whole separate things. Currently with the market touching new highs the past few months I have been shifting towards the mortgage payments. When a market correction does arrive I will shift back to funding the 401K and IRA to the max.

    I figure that’s a smarter way to gain a little better buying power over the long term.

    • July was the month after closing and I’d kept a bit of money aside for “what ifs” that I didn’t end up needing, plus I got a bonus, so I threw all of that at the mortgage. I didn’t even make my first regular payment on the mortgage until August 1st!

      I am fully funding my 401(k) before doing any mortgage paydown, but my income is high enough that I’m not sure how much I can put into a Roth IRA, so I’ll do that in January instead.

      Good luck with your investments and your mortgage!

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