Find out how two additional payments a year can make a big difference.
Accelerated bi-weekly mortgage payments are an easy way to squeeze thirteen months’ worth of mortgage payments into a single year. More payments help you put more money to your mortgage repayment each year. That means your principal shrinks faster, making you debt free earlier with less of your hard-earned dollars spent on interest. Here’s how it works:
There are 12 months a year, so with monthly payments you’ll make 12 payments in a year. But, there are 52 weeks in a year, so with bi-weekly payments you’ll actually make 26 payments each year. If each of those payments is half the amount you’d pay monthly, each year you’ll pay the equivalent of 13 monthly payments. Cool, hey?
You pay more each year with bi-weekly payments, no question. But, because of the rhythm of day-to-day life it doesn’t feel like you’re paying a lot more – until you look at your repayment progress, of course. With bi-weekly payments you can save tens of thousands of dollars in interest costs and cut three to four years off the life of your loan repayment. Hard to argue with that!