Let's say you borrowed $100,000 at 10% interest. (I'm using round numbers for ease of illustration and assuming a constant bank rate. You know that today, you'll certainly be able to get a lower rate.)
| Amortization Period | Monthly Payment | Total Payments | Total Interest Paid |
| 25 years | $895 | $268,500 | $168,500 |
| 20 years | $952 | $228,480 | $128,480 |
| 15 years | $1,063 | $191,340 | $ 91,340 |
| 10 years | $1,311 | $157,320 | $ 57,320 |
| 5 years | $2,148 | $128,880 | $ 28,880 |
2. Accelerating your payments. Opt for a weekly or biweekly payment schedule. More payments per month mean less overall interest.
Let's go back to our $100,000 loan at 10% for 25 years.
Payment Schedule Amount Total Interest Mortgage-Free
Monthly payment (12) $895.00 $168,500 25 years
Biweekly payments (26) $447.50 $118,927 18 years, 10 months
Weekly payments (52) $223.75 $118,111 18 years, 9 months
3. Put lump sum payments toward your principal.
When negotiating your mortgage, ask how frequently you can make a lump sum contribution. Most financial institutions allow a percentage of your overall mortgage to be contributed on your annual mortgage anniversary date. Depending on the type of mortgage you select, you may also be able to negotiate additional monthly, or even weekly, payments. These payments will rocket you toward mortgage freedom.
OK, here's another illustration assuming you have an $80,000 mortgage at 8% with a 25-year amortization, and you're able to put an additional $2,000 lump-sum payment toward it every year.
No Lump-Sum Payments $2,000 Annual Payments
Mortgage-Free 25 years 14.8 years
Total Interest Paid $103,165 $55,549
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