The power of extra mortgage payments

Lots of personal finance bloggers, especially after becoming debt-free, say saving is boring.

I don’t get it.

I love watching my money grow and the numbers tick up. There’s nothing better – except cheesecake, maybe.

I’m a bit of a hoarder in real life, so maybe it’s not surprising that I also like to hoard money (real or otherwise – sometimes I think wistfully of all the Neopoints I had banked back in the day).

I was so resentful of my consumer debt, basically because I didn’t actually get anything out of it. It was all incurred while supporting an unemployed partner – less consumer debt and more keeping up with bills, really.

But now that I have a mortgage, I just might be changing my tune. It’s a different story as I deliberately took on this debt, plus the payoff is so much bigger.

I don’t mind my mortgage as I wouldn’t have a home without it, but I’d like to minimise the massive effect of compounding interest working against me.

The $3,000 in extra lump sum payments I’ve made? Apparently saves over $9,000 in interest over the long run.

I get it now…!

4 thoughts on “The power of extra mortgage payments

  • Reply Francesca - From Pennies to Pounds June 9, 2016 at 19:52

    Interest is such a killer! Any savings made on interest are so important!

  • Reply The Personal Economist June 9, 2016 at 22:37

    Yep, it feels like good doesn’t it. Keep it up 🙂

  • Reply Leigh June 10, 2016 at 02:20

    I’ve always been a saver, but there’s just something about watching the mortgage balance progress towards $0 that is far more exciting than saving. I also just really love the idea of owing nothing to anyone except myself. I don’t think that mortgage debt is bad debt, but it’s still DEBT.

  • Reply Lloyd Phillips June 11, 2016 at 21:41

    In the Auckland housing market you’re sat on a little profit. Well done you for getting on the ladder.

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