A lot of us don t get the

A lot of us don't get the best value for our mortgage money. For most of us, mortgages take the majority of our own wages; for this reason we need to shop around for the best deal and many of us don't.

The most common scenario is that we go into a lender, ask how much the rate and monthly payments will be to borrow a certain amount of cash to buy a house over a certain number of years.

The bank's rate will fluctuate because they base their calculations on the present bank rate. However, a fixed quote will lock your rate in for a set term, once you and the financial institution have agreed.

The rate will also differ slightly depending on the length of the term i. e. a one year, three 12 months or five year term generally offer minimal differences in their quote.

Most of us do not realize, and are not informed, (why? ) that we could preserve ourselves at least ten per cent of our total interest costs according to the form of mortgage repayment method that we select.

Since many of us have never been provided this choice, we need to understand somewhat more about mortgage repayments to see if we can aspire to saving ourselves $16, 000 inside interest payments over a $100, 000 mortgage. That is a lot of your cash going into the bank's pocket instead of yours.

When we buy a home with a standard home loan, we end up paying mortgage payoff approximately double for it - depending on terms, interest rates etc. For instance, to borrow $100, 000 at 5. 75% interest amortized over a twenty five year time period, we may pay back over $187, 500. This is because the 'fee or fascination ' to borrow $100, 000 for all that time has cost us $87, 000. Fair enough - maybe.

All of us pay this back at the pace of $625. 00 per month meant for 25 years. This makes sense for those individuals who get paid monthly i. y. one paycheck at the end of each 30 days, a calendar month being approximately a month plus two days. However, many of us throughout North America get paid every two weeks my partner and i. e. bi-weekly.

Bi-weekly pay ensures that we do not receive 12 paychecks annually as we would if we were compensated monthly, neither do we get double that (24 paychecks per year. ) We actually get a pay check 26 times a year. This is because you can find 52 weeks in the year, and if a person split this into two each week pay periods - they number 26.

If we paid our home loan on a bi-weekly repayment schedule, we would be making a payment every 2 weeks instead of one payment every month. Therefore, we would be paying the equivalent of an extra one month's installment each year - every year. This would pay off each of our mortgage more quickly which would equal not as much interest, the savings of which is going into our pockets.

Here is an illustration using the same $100, 000 along with the same interest rate of 5. 74% amortized over the same 25 years. As opposed to paying $625 per calendar month, simply because above, we will be paying $312. fifty two (half of $625) per every two weeks.

The bank could then determine that our loan will be paid off within 21. 1 years; an amount period of 21. 1 years (instead of 25). This would mean that we will only be charged $71, 300 curiosity. This means that we will be saving $16, 397 for our own pockets AND completing paying for our home five several years earlier.

You just need to take two steps to benefit from reading this: Make the magic request to your Bank Manager for: Bi-Weekly Rapid Mortgage Repayments and get bigger wallets!