Choosing your payment frequency is one of the decisions you will need to make as we progress your mortgage application. Most lenders offer 6 options:
- Monthly
- Semi- monthly
- Bi-weekly
- Bi-weekly accelerated
- Weekly
- Weekly accelerated
The most important thing to consider when choosing your payment frequency is your monthly cash flow. You want to set up your payment frequency in a way that makes it easiest to make your mortgage payments. There are also payment frequencies that can save you interest over the years and help you pay off your mortgage faster. Here is a quick video explaining your payment frequency options and how they affect your mortgage:
To summarize:
Monthly payments
- 12 payments a year paid once per month
- a 25 year mortgage, paid once per month, will take 25 years to pay off
Semi-monthly
- sometimes called bi-monthly
- 24 payments per year
- calculated by taking the monthly payment divided by 2
- no significant interest savings or reduction to amortization
Bi-weekly
- 26 payments per year
- calculated by multiplying your monthly mortgage payment by 12 then dividing by 26 pay periods
- no significant interest savings or reduction to amortization
Bi-weekly accelerated
- 26 payments per year
- payment is higher than bi-weekly
- calculated by dividing the monthly payment by 2 then paying 26 times per year
- offers significant interest savings and significant reduction of amortization
Weekly
- 52 payments per year
- calculated by multiplying your monthly mortgage payment by 12 then dividing by 52 pay periods
- no significant interest savings or reduction to amortization
Weekly accelerated
- 52 payments per year
- payment is higher than weekly
- calculated by dividing the monthly payment by 4 then paying 52 times per year
- offers significant interest savings and significant reduction of amortization
Reach out if you want to discuss your specific scenario. I am happy to help!
Hi, I’m Jill, your mortgage pro. I am here to make the world of mortgages less confusing so you can feel confident in your financial decisions. Through my blog, I aim to provide you with the knowledge and guidance you need to make informed decisions. Your financial peace of mind is my top priority.
