Since August my wife has been working like a champ at paying down her student loans. She paid $3000 towards her student loan and only has $13000 left until her dreaded loan is paid off. In the last 3 years she has paid over $32000 and she can finally see the light. I am very proud of her accomplishment and she is amazed at the amount of money we have saved in interest. I know a lot of people only make minimum payments and choose to be oblivious to the amount of interest they are paying. Our philosophy is to get rid of it now, and enjoy the savings down the road.
On another note I have made a lump sum payment of $3000 towards our beast of a mortgage. By making that lump sum payment we save $.60 a day in interest. Laugh all you want but that's $18 a month or $216 a year that the bloody bank doesn't get! I also found out my bank allows lump sum payments right at the teller so no more annoying appointments. If I can keep up the lump sum payments I can save over $100,000 in interest and decades off my mortgage.
Once the student loan is wiped out we can focus both barrels at our Mortgage to get it paid down to a respectable level before the rates increase and we are reduced to one income when operation "stay at home dad" takes effect. We will see how things pan out because life never goes according to your plan.
Do you make lump sum payments or accelerated payments on your mortgage?
3 comments:
love the lump sum payments on the mortgage. some banks let you do them online even!
We only found out about another option near the end of paying off our mortgage. Our TD Canada Trust banking person asked us if we'd considered using our equity line of credit to pay down our mortgage. We only had it for emergencies and had never used it to that point. Although we had to pay a mortgage penalty (they wouldn't budge on that) for paying out our mortgage early, we were able to then pay as much as we wanted - no more being restricted by the bank's limits on extra payments. The proviso is that since it's a line of credit we had to be disciplined because we could pay the minimum monthly payment of just the interest. We set up automatic payments just like we had done for our mortgage and made extra payments when possible. We are now mortgage free and loving it!
@travels with becks, Congratulations on being mortgage free! It takes a lot of discipline to not spend the extra money, but focusing on the goal sure helps a lot.
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