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  • AtricleZine - Is It Better To Pay Your Home Loan Weekly, Every Two Weeks, Or Once A Month? - Pret Hypothecaire

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    e home loan until it is paid off during its amortization period.

    You can see right away that the savings from these two methods will be different. The minimum weekly payment (hypoth?que) increases the frequenc

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    One often hears that it is better to make mortgage payment once a week, or once every two weeks - pr?t hypothecaire.

    What is the impact of this strategy?

    In order to answer this question, we have to define the two possible bi-weekly payment possibllities:

    • accelerated weekly payment
    • minimum weekly payment

    The method used most frequently is the accelerated weekly payment. This is the monthly payment, divided by 4, so what you are really doing is making more than 4 monthly payments, since there is a bit more than 4 weeks in each month. This is the accelerated payment method because there are an extra 4 payments in a year, so this increases the number of payments you are paying against your loan (hypotheque) balance.

    The next method is the minimum weekly payment in which you make the minimum payment that you can on the home loan until it is paid off during its amortization period.

    You can see right away that the savings from these two methods will be different. The minimum weekly payment (hypoth?que) increases the frequency

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    e the two possible bi-weekly payment possibllities:

    • accelerated weekly payment
    • minimum weekly payment

    The method used most frequently is the accelerated weekly payment. This is the monthly payment, divided by 4, so what you are really doing is making more than 4 monthly payments, since there is a bit more than 4 weeks in each month. This is the accelerated payment method because there are an extra 4 payments in a year, so this increases the number of payments you are paying against your loan (hypotheque) balance.

    The next method is the minimum weekly payment in which you make the minimum payment that you can on the home loan until it is paid off during its amortization period.

    You can see right away that the savings from these two methods will be different. The minimum weekly payment (hypoth?que) increases the frequenc

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    t, divided by 4, so what you are really doing is making more than 4 monthly payments, since there is a bit more than 4 weeks in each month. This is the accelerated payment method because there are an extra 4 payments in a year, so this increases the number of payments you are paying against your loan (hypotheque) balance.

    The next method is the minimum weekly payment in which you make the minimum payment that you can on the home loan until it is paid off during its amortization period.

    You can see right away that the savings from these two methods will be different. The minimum weekly payment (hypoth?que) increases the frequenc

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    in a year, so this increases the number of payments you are paying against your loan (hypotheque) balance.

    The next method is the minimum weekly payment in which you make the minimum payment that you can on the home loan until it is paid off during its amortization period.

    You can see right away that the savings from these two methods will be different. The minimum weekly payment (hypoth?que) increases the frequenc

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    e home loan until it is paid off during its amortization period.

    You can see right away that the savings from these two methods will be different. The minimum weekly payment (hypoth?que) increases the frequency of payments from 12 times annually to 52 times annually, while the accelerated weekly payment method actually ADDS 4 extra weeks to the number of payments, in addition to increasing the frequency of payments.

    We can examine my studies of these two methods of mortgage payments.

    The minimum weekly payment

    On a $200,000 mortgage, with 5.4% interest and an amortization period of 25 years, the savings is $1,294.12 compared to a monthly payment. The higher the interest rate, the higher the savings, by a large margin - pr?t hypothecaire. An interest rate of double that amount would give a savings that is 7.08 times larger.

    The home owner will have a 43% savings if he pays his loan every week instead of once every two weeks. The rate of interest is not affected by this.

    How is this possible?

    The explanation is simple, but di

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