A normal bi-weekly payment, found by setting the Payment Frequency to bi-weekly, would be $268.14 rounded.Īccelerated Weekly plans are similar, but each weekly payment would be 1/4 of 581.60 or $145.40. There are 26 bi-weekly payments in a year so the difference between 581.60*12 and 581.60/2*26 is 581.60, or one extra monthly payment per year. In an Accelerated Bi-weekly plan, each bi-weekly payment would be 1/2 of 581.60 or $290.80. The total payments for the year would be 7560.80. The result is that by the end of a year you will have paid the equivalent of one extra monthly payment towards the principal.Įxample: A 100,000 mortgage at 5% interest, compounded semi-annually, with an amortization period of 25 years, results in a monthly PI (principal + interest) payment of $581.60 (rounded). By tradition, the "accelerated bi-weekly" payment is defined as 1/2 a normal monthly payment. The first thing to realize is that "accelerated" means that rather than a normal bi-weekly payment, you are also making an extra payment on the principal. This calculator allows you to analyze the effect of an Accelerated Bi-Weekly payment plan, a common type of mortgage repayment plan.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |