User:FinancialWhiz/sandbox

Mortgage acceleration is the process whereby a borrower pays off a mortgage early. The typical mortgage in the USA is stretched over a 30 year amortization schedule. To pay the mortgage off in 20 years would therefore cut the repayment by 10 years, saving the borrower from paying 120 payments. Contrast this with a refinance where the borrower starts the process all over again and pushes the payoff out an additional 30 years.

Let's take an example. Loan amount $500,000 Principal & Interest payments (monthly at 3.5%): $2,245.22

By paying according to the 30 year amortization schedule, that equals a Total Amount Paid of $808,280.44 By this schedule, you would be paying $308,280.44 of interest. No wonder it's best to accelerate this and therefore save on interest paid.

Suppose you paid off the principal owed at the 20 year mark. That would save you 10 years of payments, which is $269,426.40.

By far the easiest way to do this is putting money aside into an account that is not attached to the housing market, stock market, etc. Something fixed and compounding, like your mortgage, only compounding for you, not against you.