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Sometimes it's amazing to think that we have owned a home for 3 years. Not only is it amazing to think that we didn't have any kids just 3 years ago, it is amazing at how things can change. Since the purchase of our home, we have had two kids. It has been an amazing three years, so let's dig into the numbers!
I will recap the first two years before diving into year 3.
Year 1 Stats (includes extra principal payments)
- Total Principal Paid: $25,002.81
- Total Interest Paid: $7,782.08
Year 2 Stats (includes extra principal payments)
- Total Principal Paid: $14,132.88
- Total Interest Paid: $5,557.93
The stats above are a review of the data that I presented last year in the article, "Two Years into our Mortgage: How's it Going?" To get a more detailed breakdown of the things that influenced those numbers, I would checkout the article. Now, those are not the only stats from year 1 and 2. I also shared how paying extra principal payments has decreased the amount interest owed over the course of the loan. Below are these stats:
Anticipated Total Interest Paid over the Course of the Loan
- Beginning of Mortgage, Aug. 2015: $67,019.89
- After 1 year of Payments, Aug. 2016: $58,356.43
- Savings: $8,663.46
Anticipated Total Interest Paid over the Course of the Loan (after refinance)
- After 1 year of Payments, Aug. 2016: $58,356.43
- After Refinance, Sept. 2016: $56,871.82 (includes $7,782 already paid in year 1)
- Savings: $1,484.61
Anticipated Total Interest Paid over the Course of the Loan
- After Refinance, Sept. 2016: $56,871.82 (includes $7,782 already paid in year 1)
- After 2 years of payments, Aug. 2017: $55,512.29 (includes $7,782 already paid in year 1)
- Savings: $1,359,53
The above data shows how extra principal payments and refinancing can save you money on the interest charged over the course of the loan. Over the first two years of our loan, we have decreased the total interest paid by $11,507.60 with $8,663 of that amount being in year 1.
In year 3, we once again put more focus on our mortgage like in year 1. We did not pay off as much as year one, but we beat year 2 by about $3,000 in principal payments. Sure, we would like to see more of a decrease, however, a few emergency fund items caused us to slow down mortgage payments to allow us to build back up our emergency fund.
Year 3 Stats (includes extra principal payments)
- Total Principal Paid: $17,475.93
- Total Interest Paid: $5,517.79
Over the course of the year, we knocked off another $17,475! This leaves us with around $175,000 left on our mortgage. That is still a big chunk of change, but with our continued dedication, our mortgage will be gone in less than 10 years (if we average $17.5 in principal paid off each year).
Anticipated Total Interest Paid over the Course of the Loan
- After 2 years of payments, Aug. 2017: $55,512.29 (includes $7,782 already paid in year 1)
- After 3 years of payments, Aug. 2018: $52,803.33 (includes $7,782 already paid in year 1)
- Savings: $2,708.96
I feel like we really didn't make a dent again this year, however, we still decreased the principal by $6,000 extra dollars. Based on our current amortization schedule, we have knocked off 6 more months of our mortgage (3 months last year). Therefore if we don't make any extra payments, we will be debt free after 14 years and 3 months. Of course, we plan on continuing extra mortgage payments, which will lead us to pay off our mortgage earlier.
Lastly, let's look at the amount saved since the beginning of our loan:
Anticipated Total Interest Paid over the Course of the Loan
- Beginning of Mortgage, Aug. 2015: $67,019.89
- After 3 years of payments, Aug. 2018: $52,803.33
- Savings: $14,216.56
It's amazing to think that three years of extra payments has saved us $14,216.56! That's a lot of savings, by just trying to pay down the house faster! This puts our estimated mortgage payoff date to January of 2031. Pretty soon, we will be looking at 2030 as a payoff date. And with our continued effort to pay off early, I expect our payoff will be earlier than 2030.
What are your thoughts? Do you have any struggles with your mortgage payoff? Do you want more frequent mortgage updates? Let me know in the comments section below.
