When you set up your mortgage payment repayment plan, you can choose between a standard repayment plan or a bi-weekly repayment plan. With the standard plan, it would take you 30 years to repay the loan while a fortnightly plan will take 25 years and seven months. This will save you four years and five months… but the savings doesn’t end there.
If you took out a $250,000.00 loan with an interest rate of five percent, you could expect to pay $1,334.23 per month, while a fortnightly payment plan would call for a payment of $667.11 every other week. As a result, you would pay only $192,341.26 in interest with the fortnightly schedule rather than $230,321.61 with the standard payment plan. This means you could save a total of $37,980.35 with the fortnightly plan.
DISCLAIMER: There is NO WARRANTY, expressed or implied, for the accuracy of this information or it’s applicability to your financial situation. Please consult your own financial advisor.