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Payment Frequency Explained

The payment frequency you decide on will impact your mortgage payments, flexibility and savings goals. Here are some pros and cons — Don’t worry, i’m here to help!

Quick Answer...

Mortgage payment frequency refers to how often you make payments toward your mortgage loan. The most common mortgage payment frequencies are monthly, bi-weekly, and semi-monthly, but some lenders may offer other options as well. Here's a breakdown of the key differences:

  1. Monthly Payments:

    • Most common payment frequency.

    • You make one payment every month.

    • Results in 12 payments per year.

  2. Bi-Weekly Payments:

    • Payments are made every two weeks.

    • Results in 26 half-payments per year, which is equivalent to 13 full payments.

    • You effectively make one extra payment each year compared to monthly payments.

    • This can help you pay off your mortgage faster and save on interest over the life of the loan.

  3. Semi-Monthly Payments:

    • Payments are made twice a month, typically on specific dates, such as the 1st and the 15th.

    • Results in 24 half-payments per year, which is equivalent to 12 full payments.

    • Some borrowers find it convenient to align their payments with their paychecks.

The main difference between these payment frequencies is the timing and frequency of the payments. Bi-weekly payments result in an extra payment per year, which can accelerate your mortgage payoff and save you money on interest in the long run. Monthly payments are standard and can be more manageable for some borrowers, while bi-monthly payments are somewhat of a compromise between monthly and bi-weekly.

When choosing a payment frequency, it's essential to consider your financial situation, budget, and personal preferences. Some people opt for bi-weekly payments to save on interest and pay off their mortgage faster, while others prefer the simplicity of monthly payments. Your lender may offer one or more of these payment options, so it's a good idea to discuss your choices with them and consider your financial goals when making a decision.

*Accelerated payments are also an option with most of my lenders.

*Most of my lenders will allow you to pay up to 20% annually on top of your mortgage payment which will reduce the amortization as the payment is made directly to the principle amount.  I have plenty of strategies for this and will discuss further in our meeting.

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