Posted on: 31st Mar, 2007 12:22 pm
will it be good to choose a bi weekly payment plan, can it help in interest savings?
Hi Pierino,
It can certainly help to save interest over the life of the loan if bi weekly payments are made. Let me give you one example to explain how.
If you have a $100,000 30 year mortgage with interest rate of 6.5% and you select to make bi weekly payments then total interest you will have to pay will be $98,169.68 while with a monthly payment plan interest payments will be $127,543.01.
What it means is you will save $29,373.33 by selecting a bi weekly payment plan.
David
It can certainly help to save interest over the life of the loan if bi weekly payments are made. Let me give you one example to explain how.
If you have a $100,000 30 year mortgage with interest rate of 6.5% and you select to make bi weekly payments then total interest you will have to pay will be $98,169.68 while with a monthly payment plan interest payments will be $127,543.01.
What it means is you will save $29,373.33 by selecting a bi weekly payment plan.
David
Pierino, for the example david mentioned a person will be able to pay off the mortgage a lot earlier (70 months early) than its actual term, i.e., instead of 360 months the mortgage will get paid off in 290 months.
Hi Pierino,
Welcome to Mortgagefit discussion board.
David gave you an example of how bi weekly payments would result in interest savings. You can use this following calculator yourself to know what the savings will be for your loan: http://www.mortgagefit.com/calculators/biweeklypayment-saveinterest.html
Do let me know if you have any other questions.
Thanks
Blue
Welcome to Mortgagefit discussion board.
David gave you an example of how bi weekly payments would result in interest savings. You can use this following calculator yourself to know what the savings will be for your loan: http://www.mortgagefit.com/calculators/biweeklypayment-saveinterest.html
Do let me know if you have any other questions.
Thanks
Blue