In most cases, it is best to get the shortest possible amortization coupled with the lowest interest rate possible. This is how you save money on your mortgage in the long term.

However, you have to be careful. The shorter the amortization, the higher the payment. So, while you save money over the long run because you pay less in interest charges for your loan, you have to be able to afford the payment in the short term.

One option which reduces your risk and still lets you save money is to keep your mortgage at a 25 or 30 year amortization, but increase your payment. Most lenders will let you do this without penalty. Increasing your payment by even a very small amount will let you pay off your mortgage years earlier, while leaving you the option of reducing your payment back down to the original amount in the case that you need that money.

So, let's say you get a 5 % raise this year. If you have the right mortgage you could simply increase your mortgage payment by 5%. While a very small change in the amount that you pay per payment, it will make a big difference over many years. Every penny of that extra 5% is paying off the balance (or principal) of your loan.

Then, a new baby arrives. You want the 5% back? You reduce your payments back down and away you go.

Remember that most mortgage lenders will have some restrictions on the amount that you can increase your payment and the number of times you can adjust it.

The other way to really cut the time off your mortgage is to make lump sum payments against it. Can't see your way to increasing your payments? Fine. This year, take your yearly bonus and put it directly against your mortgage. Again, every dollar will reduce the balance of your mortgage and will mean that you pay less interest in the long run. Even small amounts every year will reduce the amount of time it takes to pay your mortgage off - and who doesn't want to be mortgage-free?