In January of 2009 we refinanced our mortgage, lowering our interest rate from 5.5% to 4.75%. So how did we do last year? We lowered our outstanding balance from $144,100 to $140,901. Our mortgage payment is $751.70 (interest and principal only). To that we paid an extra $110.30 per month for 10 months (beginning in March). So we paid an extra $1,103 last year. Plus, our credit card, instead of cash back pays our mortgage, so from that we paid an extra $225. We paid a total of $3,199 off in total principal last year in basically 10 months. Not bad.
Hopefully this year we can make an even bigger dent into that principal. I would love to pay this off in 15 years and save all those “pennies” in interest, but we would have to drastically increase our payments. Since banks aren’t paying any interest right now, I would rather get a 4.75% return on my pennies (savings on the interest from the loan) than the 1% the banks are giving. However, right now we have to focus on our emergency fund and get that built back up first since our “water” emergencies have drained our fund. After that is built up, maybe we can shift focus.
