Pay Off Your Mortgage Debt with Biweekly Accelerated!
In this blog, I’ll explain what ‘accelerated’ means, how it differs from regular payments, and give you the data to prove why it’s such an effective method for making your mortgage payments.
Fact: Biweekly regular payments are NOT the same as biweekly accelerated.
Many clients who pay biweekly think they are paying off their mortgage faster, but in fact, they aren’t!
The first step to get clarity on your current mortgage payment is to check your mortgage statement and confirm whether it indicates ‘accelerated’ on the statement.
You can also do this by confirming your original monthly payment and dividing it in half. That total is what you should be paying on the accelerated plan.
For example, if you have a mortgage for $300,000 at 3.5% interest, your monthly payment is $1,342.91. Thus, your accelerated biweekly payment will be $671.45. By paying biweekly accelerated, you will save $20,330.19 in interest. That’s a huge amount of interest saved!
Now, let’s do some simple math.
Let’s say your mortgage payment is $1,000 per month. At the end of one year, you will have paid $12,000 towards your mortgage.
Biweekly regular calculation: $12,000/year divided by 26 = $461 every two weeks. In this scenario, you will pay the most interest to your lender.
Biweekly accelerated calculation: $1,000/month equates to $500 every two weeks. $500/biweekly X 26 payments equal to $13,000 per year. That extra $1,000 payment per year will go directly towards principal and pay off your mortgage faster!
Do you want to find out if you are paying regular biweekly or biweekly accelerated?
Contact your lender OR call me today for a second opinion!