See the difference
in real numbers.
A mortgage acceleration strategy becomes much easier to understand when you can see the numbers side by side. Here is a simplified illustration based on the example currently used in H.E.A.P.™ educational materials.
Start with a typical mortgage.
$200,000
INITIAL MORTGAGE
30 Years
ORIGINAL TERM
Traditional
MONTHLY REPAYMENT
H.E.A.P.™
ACCELERATION STRATEGY
Traditional mortgage vs. H.E.A.P.™
The point is not simply to “pay extra.” The H.E.A.P.™ concept is about using available cash flow more strategically so principal can be reduced sooner and future interest expense can be reduced.
Standard mortgage repayment
Starting balance
$200,000
Scheduled term
30 years
Primary objective
Make required payment
Gradual
Accelerated equity strategy
Starting balance
$200,000
Focus
Reduce principal sooner
Interest saved*
$128,529
More equity.
Less interest.
*The current H.E.A.P.™ example page states $128,529 of interest savings on a $200,000, 30-year mortgage. This is an illustration, not a guarantee of results.
WHAT CHANGES?
It's about changing when your money works.
1
Income Arrives
2
Expenses Continue
3
Available Cash Works
Available dollars are used strategically against mortgage debt.
4
Equity Accelerates
Lower principal can mean less future interest and faster equity growth.
A smaller balance can mean a smaller interest burden.
The earlier principal is reduced, the less balance remains outstanding over time. The visual below is conceptual, but it shows why timing matters.
The H.E.A.P.™ analysis is meant to answer a simple question: Could your existing cash flow be working harder for you?
Your mortgage is different.
The useful number is not what happened in this example. It is what H.E.A.P.™ could look like using your own mortgage and cash flow.