Strategy #2: Optimizing Principal to Payment Ratio

Описание: Do you know from your mortgage payment, how much goes to principal vs interest?
Find out your Cost of Credit - https://mortgageslab.ca/cost-of-credit/

The second strategy focuses on increasing the portion of each mortgage payment that goes toward reducing the principal rather than paying interest.

Standard Bank Principal to Payment ratios:

30-year mortgage: 75% interest / 25% principal
25-year mortgage: 70% interest / 30% principal
Target with optimization: 50%+ to principal

Why this matters: The higher the principal portion, the faster amortization reduction and lower total cost of credit.

Implementation methodology:

Link line of credit checking account to mortgage
Deposit all household income to this account
Pay all expenses from this account
Automatic application of surplus to mortgage principal monthly
Example: $11,000 net income - $5,600 expenses = $5,400 monthly to principal

Real result: Principal-to-payment ratio increased from 48% to 67%, dramatically shortening amortization. This requires specific mortgage products that allow flexible principal contributions with linked checking accounts.

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