Payment FrequencyA variety of different mortgage payment options are available to you: monthly, semi-monthly, weekly, bi-weekly, accelerated weekly, and accelerated bi-weekly. Making accelerated weekly or bi-weekly payments can substantially reduce the cost of interest you pay as well as reduce the life of your mortgage.
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Accelerated Weekly PaymentsAn accelerated weekly payment is calculated by dividing your monthly mortgage payment amount into four to arrive at a weekly payment. Since there are 13 four-week periods in a year (52 weeks a year), you will make the equivalent of one additional month’s payment each year. This additional amount accelerates your loan payoff by going directly against your loan's principal. The effect can save you thousands in interest and take years off of your mortgage.
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Accelerated Bi-Weekly PaymentsAn accelerated bi-weekly payment is calculated by dividing your monthly mortgage payment by two to arrive at 26 bi-weekly payments. Just like the accelerated weekly payments you are in effect paying an additional monthly payment per year. Use the Life Events Planner – Mortgage Payoff Calculator to find out how much you can save. |
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Payment Frequency ExamplesProvided below is an example showing the difference between a monthly payment frequency versus an accelerated payment frequency. |
Monthly Payment Schedule |
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Mortgage Payment = $1,000 per month |
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Months in a Year = 12 |
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Total Annual Mortgage Payments = $12,000 ($1,000 x 12) |
Accelerated Weekly Payment Schedule |
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Mortgage Payment = $250 per week ($1,000 divided by 4) |
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Weeks in a Year = 52 |
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Total Annual Mortgage Payments = $13,000 ($250 x 52) |
Accelerated Bi-Weekly Payment Schedule |
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Mortgage Payment = $500 bi-weekly ($1,000 divided by 2) |
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Bi-Weekly Payments in a Year = 26 |
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Total Annual Mortgage Payments = $13,000 ($500 x 26) |
Calculation examples are made available to you for demonstration purposes only with the assumption the interest rate does not change during the amortization period. Community First does not guarantee their applicability or accuracy in regards to your individual circumstances.
