Variable Rate Loans Suck

When we purchased this house, we got 2 mortgages so we could avoid paying PMI. We were sold on the idea when we found the interest payment on the 2nd mortgage was tax deductible as opposed to PMI, which was not. We were told the interest on the 2nd mortgage would be 7.25%. When we signed the loan documents, we discovered this was a variable rate loan. They gave us an initial rate of 5.25% for the first 3 months but after that it could jump as high as 18%. Not a pretty picture but at that point we were kind of stuck! Then, when we got the first month's bill, I also discovered it was an interest-only loan. Man have I learned lessons for the next time around! As if I really want to pay only interest on a loan for 5 years and then start paying really high payments when the principal part kicks in too?
Anyway, this month is our first month with the raised interest rate.... it jumped to 8.25%! This is now officially higher than my credit card! Our interest-only payment jumped from around $105 to around $165. Yuck!
So far we've been paying extra every month. I think we're going to try to continue this. Every month that we can afford to, we'll be sending an extra $300+ to pay down the principal. I want to get rid of this loan asap. Unfortunately, its over $23,000 still so this will take a while :( I'm hoping by doing it this way we can pay it off in something like 5 years instead of 15 though.
And of course we have all the stuff we bought for the house to pay off in the next year so paying this extra money is going to keep things real tight. But I'd rather live on a tight budget for a year than have this loan suddenly jump to 18% when I still have a 20,000 dollar balance!!
So, next time around I definitely know to keep my eye on the whole loan process better. And in the meanwhile, wish me luck getting this damn thing paid off asap!!