No Credit Needed, a long-time debt reduction blogging colleague, after having gotten rid of his non-mortgage consumer debt, has been chipping away at the big one: his home mortgage.
He’s on track to pay off his 15-year fixed rate mortgage three years early, and is aiming to get it paid off five years early.
They’re making additional micropayments throughout the month. These are principal-only payments. This has two effects:
- The micropayments reduce the balance immediately. This means that the interest accrues on a smaller balance, immediately.
- The next regular payment will include more principal and less interest. Every payment following an extra principal payment works a little harder than it would otherwise.
So this is a great thing to do, especially if you have an ample emergency fund and have a consistent, well-planned budget. Any extra money that comes in can be thrown at the debt.
Keep doing what you do, NCN, and we’re praying for a mortgage payback time of less than ten years!