; Pay mortgage Faster – Ccondos for Sale & Rent in Toronto – MIZONE REALTY INC. Brokerage. CANADA

 

Accelerating your mortgage payment schedule

Banks offer you this great choice of payment options like Monthly, Semi-monthly, Bi-weekly, Weekly, Accelerated bi-weekly and Accelerated weekly.

You also have the freedom to choose the day of the week or date of the month your mortgage payment is due, so you can schedule your payment to coincide with your paycheque — a convenient budgeting feature.

Increasing Your Payment Frequency

You can save interest by increasing your mortgage payment frequency. When you select an accelerated weekly or bi-weekly payment option, you are essentially making the equivalent of one additional monthly payment each year which will help pay off your mortgage faster.

 

Accelerating your mortgage payment schedule

Banks offer you this great choice of payment options like Monthly, Semi-monthly, Bi-weekly, Weekly, Accelerated bi-weekly and Accelerated weekly.

You also have the freedom to choose the day of the week or date of the month your mortgage payment is due, so you can schedule your payment to coincide with your paycheque — a convenient budgeting feature.

Increasing Your Payment Frequency

You can save interest by increasing your mortgage payment frequency. When you select an accelerated weekly or bi-weekly payment option, you are essentially making the equivalent of one additional monthly payment each year which will help pay off your mortgage faster.

Example: $150,000 Fixed-Rate Mortgage at 5.5%

This chart illustrates how you can reduce your amortization period and save on interest costs by choosing a more frequent payment schedule.

Payment Amount       Amort. (Years)    Amortization Interest Cost
Monthly $915.59       25.0    $124,675.23
Semi-monthly $457.80       25.0    $124,013.33
Bi-weekly $422.58       24.8    $122,919.67
Weekly $211.29       24.8    $122,620.77
Accelerated bi-weekly $457.80       21.2    $102,289.95
Accelerated weekly $228.90       21.2    $102,044.46

In this example, choosing accelerated bi-weekly payments instead of monthly payments on a $150,000 mortgage would save you more than $22,000 in interest costs, and cut more than 3.5 years off the life of your mortgage.

Making double-up mortgage payments

Your Double-Up payment is applied directly against the principal balance of your mortgage, which cuts down the life of your mortgage and saves interest costs.

Some banks offer Double-Up option gives you the flexibility to prepay any amount between $100 and the equivalent of the principal and interest portion of your regular monthly mortgage payment on any or every payment date.

Example: $150,000 Fixed-Rate Mortgage at 5.5%

This example shows how effectively you can reduce the time it takes to pay off your mortgage simply by doubling up one monthly payment each month.

This example shows how effectively you can reduce the time it takes to pay off your mortgage simply by doubling up one monthly payment each month.

Monthly payments and 25-year amortization With one double up payment of $100 per month
Mortgage repaid (years) 25      20.4
Total interest cost $124,675.23     $98,560.10
Interest savings N/A     $26,115.14