splitting mortgage payments

**chris w** · 01-16-2012, 03:38 PM

Paying bi-weekly is the same as paying 1/12 of your payment each month in addition to the regular payment. the big difference is the fee for signing up to do bi-weekly. Most places Ive seen is 350 - 375 for the privilege of doing this. Skip the fee and just pay the 1/12 to principle.

**Greebo** · 01-16-2012, 03:42 PM

Originally Posted by chris w

Paying bi-weekly is the same as paying 1/12 of your payment each month in addition to the regular payment. the big difference is the fee for signing up to do bi-weekly. Most places Ive seen is 350 - 375 for the privilege of doing this. Skip the fee and just pay the 1/12 to principle.

Well, kinda mostly sorta.

Thing is, with automatic bi-weekly payments, what you end up getting is a regular payment made every 4 weeks for about 6 months and then you get an extra 1/2 payment made directly to principle. So you get a bigger chunk paid to principle every 6 months ish, but actually paying 1/12 extra EACH month is BETTER because you pay down the debt a little sooner, which in a long term mortgage has a bigger overall net effect.

**Grayce** · 01-16-2012, 06:48 PM

I live in Canada and pay my mortgage bi-weekly. There is no fee to do it. I end up paying a little extra each year. I also save additional interest because my bank calculates interest every 2 weeks instead of monthly.

**MomToTwoBoys** · 01-17-2012, 06:44 PM

When we did once every two weeks, we did end up paying off the mortgage quite a bit in five years. We started out at about $119k and when it came time to sell, it was at $100k. We had a mortgage of $333 every two weeks and on the months where we had an extra cheque, that was another $333 coming out.

When we got a second mortgage for our second house, we went with the 1st and the 15th. The broker told us that we really wouldn't save all that much per year, so we decided to go this route instead.

Canadian mortgages and American mortgages are completely different as far as the extra money being paid off is concerned, especially with interest rate calculations.

It would actually be wiser to take that extra payment and save it for when you can pay extra on the principle alone.