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Accelerated Bi-Weekly Mortgage Payments | Scott Dawson
(778) 668-9320 [email protected]

How do accelerated bi-weekly mortgage payments work and how can they help pay your mortgage off faster?

If you’re looking for ways to pay off a mortgage faster, you have three basic options; reduce your amortization period, increase your monthly mortgage payment or change the way you make your payments.

Not to be confused with semi-monthly mortgage payments (24 payments per year), accelerated bi-weekly mortgage payments (26 payments per year) will not only pay your mortgage off faster, but it’s guaranteed to save you a significant amount of money over the term of your mortgage.

Here’s how Accelerated Bi-Weekly Mortgage Payments work

Let’s say you have a mortgage of $100,000, with an interest rate of 5.00% and an amortization period of 25 years. Your monthly mortgage payment would be $581.60 and your total payments for a year would be ($581.60 x 12) = $6,979.20.

To understand the savings accelerated bi-weekly mortgage payments can make, take the monthly mortgage payment of $581.60 and divide it by two ($581.60 / 2 = $290.80). Then take that payment and multiple it by 26 to arrive at your total of all payments for the year ($290.80 x 26 = $7,560.80).

There’s the difference. Using the monthly mortgage payment plan, you’ve made a total of $6,979.20 worth of payments for the year, while using the accelerated bi-weekly mortgage plan you’ve made $7,560.80 worth of payments, a difference of $581.60. Basically with accelerated bi-weekly mortgage payments, you’re making one additional full monthly payment each year.

Using this example, you would reduce the amortization on your $100,000 mortgage from 25 years to just over 21 years and a total savings on interest, over the life of the mortgage, to just over $12,000.

Looking for more ways to pay off your mortgage faster?

Are you ready to save $1000’s? Contact me and I can show you how! If your mortgage doesn’t offer you the flexibility you need to pay down your balance faster we can also look at switching your mortgage to a lender that does. All with no cost to you!

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