How To Take 5 Years Off Your Mortgage.

Ryan here with City Wide Financial, talking about accelerated payments & why every mortgage holder should be using them.

Mortgages are a lot like having a bratty teenager: the more attention you give them, the less money they’ll cost you. Mortgages respond very well when there is someone actively engaged in managing them. Whether that’s me, whether that’s you, part of giving your mortgage more attention is making payments more frequent than regular monthly. Accelerated payments are either semi-monthly, bi-weekly or weekly. They have the effect of paying off your mortgage up to 5 years ahead of schedule. If you’re taking a 30 year mortgage, choosing accelerated payments are almost the same as choosing a 25 year mortgage – big savings for doing very little.

So what are they? Well with bi-weekly, for example, we take your monthly payment, cut it in half & arrange for you to make that payment every 2 weeks. Now, because there are 52 weeks in a year, that’s 26 bi-weekly payments, which is the same as 13 monthly payments. So, accelerated bi-weekly payments effectively squeeze in an extra month of payments into the calendar year.

If you have a $300,000 mortgage over 30 years at 5%, accelerated bi-weekly payments will pay off the mortgage in 25 years & 3 months, nearly 5 years earlier. Not only that, but you’ll pay off nearly $10,000 more principle & save over $50,000 in unpaid interest. Big savings.

Everyone’s mortgage should be on accelerated payments. We can match the mortgage to coincide with your paydays If you’re paid semi-monthly & don’t want the confusion of paying every 2 weeks, contact me & I’ll explain how we work around that. Otherwise, that will be a topic of a later blog.

If you, any friends or family would like to know how much accelerated payments could save you, contact me, I’m Ryan at City Wide Financial.

Ryan Zupan
Mortgage Planner

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