Here is a familiar look at Shawn’s mortgage.
If Shawn were to pay $1 extra towards his mortgage at any time in the first 20 years, he would double his investment. In fact, in the first 3 years, $1 prepaid would save him more than $6.
Patience
- Shawn will still have a mortgage payment due the next month
- For the same amount
- Shawn still has decades of mortgage payments
Diligence
Shawn sees the benefit of making a single prepayement. Now let’s look at the benefit of multiple prepayments.