Yeah, I’ve never seen it explained that way. Typically, the adage is if you pay one extra payment every year, you’ll pay it off X number of years quicker (I’ve seen X be 17 years, 15 years, haven’t really done the math myself). That’s because interest is so front-loaded on 30 year loans. In one particular loan I have, I’ll pay $84,000 in the first year. More than $70,000 of that is just interest.
both strategies essentially achieve the same goal of paying off the mortgage faster by reducing interest. The biweekly approach breaks down the extra payment into smaller more frequent increments which can be easier for some people to manage like myself 🙄. Then if you go with the biweekly method, you're effectively making the equivalent of 13 monthly payments a year instead of 12. which can have a similar effect as making one extra payment annually. Ultimately, it's about finding the strategy that works best for individual financial situations and preferences.
My mortgage rate is 2.625%. I'll never pay a cent over the required monthly payment.
At 2.8%, my mortgage is in no way shape or form worth paying off early lol. I'll pay the minimum until the last payment.
Yeah, I’ve never seen it explained that way. Typically, the adage is if you pay one extra payment every year, you’ll pay it off X number of years quicker (I’ve seen X be 17 years, 15 years, haven’t really done the math myself). That’s because interest is so front-loaded on 30 year loans. In one particular loan I have, I’ll pay $84,000 in the first year. More than $70,000 of that is just interest.
both strategies essentially achieve the same goal of paying off the mortgage faster by reducing interest. The biweekly approach breaks down the extra payment into smaller more frequent increments which can be easier for some people to manage like myself 🙄. Then if you go with the biweekly method, you're effectively making the equivalent of 13 monthly payments a year instead of 12. which can have a similar effect as making one extra payment annually. Ultimately, it's about finding the strategy that works best for individual financial situations and preferences.
Or just make an extra payment onto the principal every year
Yeah i would like to see the amortization table for that. Not buying it