A system and method for computing mortgage amortization so as to allow the borrower to pay down the principal portion of his or her mortgage faster includes calculating traditional and modified principal and interest repayment amounts and calculating a baseline or average principal and interest amount payable over the life of the loan. An interest Index rate is established. Principal payments are placed in an interest-bearing account administered by the lender. Changes in interest rates are computed on a monthly basis. When the current monthly interest rate is less than the initial Index rate, the difference in interest payments received needed to fund the loan and the amount paid by the homeowner are split between the homeowner and the lender. When the current monthly interest rate is greater than the initial Index rate, additional funds must be withdrawn from one or more established accounts or collected directly from the homeowner to fund the loan for that month. Principal payments and any funds left in the homeowner's interest-bearing account are used to reduce the principal of the loan.