I hope anyone in this community can help enlighten me regarding my mortgage loan. I’ve read a lot that paying bi-weekly will help save more to the interest and can help to pay mortgage faster with additional payment to the principal. I am wondering when do I pay if my mortgage payment due is 1st-15th of each month.
Thank you so much!
Hi there,
The reason why paying bi-weekly helps you save more interest and pay the mortgage faster is because there are months where you send more than 2 payments.
So for example, if your bi-weekly schedule started on Nov 1, 2020 then your payment will go through on Nov 2 (because Nov 1 is on a Sunday). The next payment will be on Nov 16 (2 weeks after and because 15th is on a Sunday). Normally, you only pay 2 times but on this case, you will be paying a third time on Nov 30.
So if you compare it with bi-monthly payments, you send more payments if you do bi-weekly payments. Bi-monthly payments, you only send 24 payments (no more, no less) a year. As for bi-weekly, you send more than 24 payments in a year (depending on the date you started paying). And the more payments you send, the more payment goes to paying off the principal.
Alternatively if it’s too difficult or confusing, you could just make an extra payment every year for the same effect, or add extra money towards your principle with every monthly payment