In this example the family borrowed $200,000 for a mortgage on their home, with a 30 year term, and an interest rate of 5.625%. The required monthly payment is $1151.31.

Making an extra principal payment of $5,000 once each year in December, and increasing the amount of the monthly payment by 5% each July (to match your expected annual raise), the loan is paid off in less than half the time (from 360 to 143 months) and interest and total out-of-pocket costs are substantially reduced (from $414,472 to $283,444).

Notice also that in the last month of the schedule, December, the extra payment reduces from $5000 to $3575.47 to match the balance payoff amount.