Well I'm one month away from my 1 year anniversary in my house so I thought that I'd take a quick look at where my mortgage stands.
Original Balance: $152,000.00
Current Balance: $125,223.25
Original Number of Months: 360 (30 years)
Current Number of Months: 235 (19.58 years)
Change: 125 (10.42 years)
Original Equity: $39,000 (20.42%)
Current Equity: $65,776.75 (34.44%)
Change: $26,776.75 (14.02%)
Not bad for the first 11 months of a 5 year stretch. I've stuck with it and paid the maximum amount allowed each and every month and paid down my 10% principal to boot. As a result I've paid down 17.62% of my mortgage balance. [($26,776.75/$152,000.00)*100]
You may be scratching your head saying well if she want's to pay it down in 5 years shouldn't she pay off 20% per year? Well in order to avoid penalties I have to play by the banks rules. One of these is that I can increase my monthly payment by 10% each year. So my payment which started off at $646.62 is currently $711.28 which doubles up to $1422.56. Come next November I'll be able to increase that to $782.40 which doubles up to $1,564.80. As a result I can pay down a larger amount each year. Thus the fact that I paid down 17.62% of my balance instead of 20% is ok, since in the last couple years I'll be able to pay more then 20% of the balance without penalty.
Looking forward not only will I be able to increase my payments to the aforementioned $1,564.80 per month, but I also have my next 10% principle payment ready and waiting to go for the 8th of November.
The anticipation is killing me. :)