When deciding on what type of payment structure to select for your mortgage, it is a good idea to consider bi-weekly accelerated payments.

By choosing to make bi-weekly accelerated payments, you will pay 1/2 of your monthly mortgage payment every 2 weeks. This will result in 26 payments per year, or in essence 1 extra monthly mortgage payment.

Yes, that does mean that you are actually making larger payments towards your mortgage over the course of the year, but the short term pain results in long term gain.

The benefits include shaving years off of the life of your mortgage and more importantly, significant interest savings for you.

For example:

A $200,000 mortgage with a 5.25% interest rate paid monthly, will require $157,549 in total interest to be paid over the 25 year amortization period.

That same $200,000 mortgage at a 5.25% interest rate with bi-weekly accelerated payments, will require $131,114 in total interest to be paid over a revised amortization period of 21 years and 5 months.

By using the bi-weekly accelerated payment structure, you are mortgage free 3+ years earlier and have saved over $26,000 in interest costs.

Weekly accelerated payments will save you even more!