By Anne Marie Froud

If you're waiting to be mortgage-free in twenty-five years you're missing the opportunity of a lifetime. Let me show you why. Let's say you took out a $100,000 mortgage today, at 8.50%, amortized over 25 years. Your monthly payment will be $795.36. In 25 years, you would have paid $238,609.06 for the mortgage. If you increased your monthly payments by just $50 per month, for the lifetime of the mortgage, you will pay off your mortgage in 20 years and 8 months. You would realize a total interest savings of $27,285.36 over the life of the mortgage.

Now let's take the same situation and say you paid just $1000 once a year, against your outstanding principal. Your mortgage will now be paid off in 16 years & 8 months; an interest savings of a whooping $51,891.49. Imagine the savings if you could pay more than $1000, a year against the principal! Doesn't it make sense then, that when you take out a mortgage that you also have a mortgage reduction plan in place?