bankrate biweekly mortgage calculator with extra payment

BANKRATE BIWEEKLY MORTGAGE CALCULATOR WITH EXTRA PAYMENT FREE

To keep loan payments from fluctuating due to interest, institutions use loan amortization.Īmortization takes into account the total amount you'll owe when all interest has been calculated, then creates a standard monthly payment. Basically, the less principal you still owe, the smaller your interest is going to end up being. The amount of interest you pay on the borrowed money, or principal, changes as you pay back the money. When you get a loan from a bank or a private financial institution, you have to pay interest back on the money you borrow. You can also take advantage of amortization to save money and pay off your loan faster. Loan amortization doesn't just standardize your payments. Your loan may have a fixed time period and a specific interest rate, but that doesn't mean you're locked into making the same payment every month for decades.

BANKRATE BIWEEKLY MORTGAGE CALCULATOR WITH EXTRA PAYMENT FREE

In any case, before you start making weekly mortgage payments, be sure to check with your home loan company to make sure your principal prepayments will be applied to the balance as you make them - free of any prepayment penalties.How to Accelerate Repayment with Loan Amortization While some of these companies will simply escrow your prepayment and apply payments as they were scheduled (giving you 'the finger' for your early payoff attempt), the more dastardly among them will go so far as to charge you a penalty for prepaying the principal. Since switching to weekly payments results in the prepayment of principal ahead of the original home loan terms, there are numerous, unscrupulous mortgage companies out there that take offense to you cutting into the massive year-end bonuses they have promised to their executives.

Beware of Excessively Greedy Mortgage Companies The above formula is the one used by the weekly mortgage payment calculator on this page, which results in making the equivalent of 14 monthly payments per year. Weekly payment = Monthly payment x 14 ÷ 52 In other words, your weekly mortgage payments would be calculated as follows: Therefore, to significantly increase your bi-weekly mortgage interest savings when switching to a weekly repayment method, you would need to look at making the equivalent of 14 monthly payments per year instead of the 13 you would make using the bi-weekly payment method. However, if you divide your monthly payment by 4 and pay that result on a weekly basis, you will see that the annual total of your 52 weekly payments would be identical to making 26 bi-weekly payments.

Now you would think that we could double the savings if we use the same process to switch from monthly payments to making weekly mortgage payments. This will result in making 26 bi-weekly payments per year, which is the equivalent of making 13 monthly payments per year instead of 12. One way to do that - while hardly noticing the increase - is to simply make 1/2 of your monthly house payment every two weeks. To save a large chunk of time and interest, you need to increase the annual total of your payments. This is because the annual total of your weekly mortgage payments will be close to the same as the annual total of your monthly payments. If you simply enter the terms for a new home loan into the weekly mortgage payment calculator, you will note that you may only save a couple of hundred dollars by choosing to repay the home loan using weekly mortgage payments vs.

Bankrate biweekly mortgage calculator with extra payment