Question

Have you guys switched your mortgage payment to coming out twice a month versus once a month? I've seen the amount of money that can be saved in interest by doing this? Has anybody's bank told them no, they won't allow that?  

Answer 1

My mortgage Co won't let me pay twice a month electronically . They said I can mail a check and then they will hold it and then mail another . LAME! If they just hold it then it's the same as paying it once !  

Comments

@dextroamphetamine45 that’s annoying. I’m afraid that’s what mine will do.  

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@shulamite yeah definitely call and ask or look under FAQ in their site

Answer 2

The bank my husband and I use lets us do bi-monthly payments and we have save. Also, a couple of years ago we refinanced and even though our payments were lower, we pay the same amount that we payed before. we knocked even more years off our mortgage by doing this!  

Answer 3

We did this with a previous home and I loved it. The amortization schedule showed it would knock 7-10 years off our mortgage. With our second home the lender wanted to charge $700/year for "program administration" (it was Citimortgage). When I tried to send extra money in per month they never could apply the money correctly. Don't pay extra for a program to make bi-weekly payments. You can do it yourself. If you do make sure you stay on top of your payments so the monies are applied to principal correctly. Another approach to consider - biweekly payments usually amount to somewhere around two-and-a-half 100% principal mortgage payments per year. Make a 12-month sinking fund and save two or three mortgage payments across 12 months. At the beginning of the year pay 100% of those funds toward principal. You only have to watch one annual payment to your mortgage company and don't have to deal with any type of management/program fees.  

Answer 4

Ours doesn’t offer that as an option.  

Answer 5

Our lender won’t let us pay twice a month. I would definitely take advantage of that option if we could!  

Answer 6

We pay weekly (we are also paid weekly) so it makes each payment super manageable. We do it also with our car loan payments.  

Comments

@geneticist do you right a check every week then? Our mortgage and everything isn’t local so it cost extra to make a payment online.  

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It’s done automatically online. I am in Canada and use a credit union so perhaps that makes a difference. We also have our day to day banking there. I haven’t had to write a cheque or go into the branch in years. Maybe you could write them post dated cheque’s?  

Answer 7

If your mortgage company won’t let you do this, what my coworker said she does is has a separate account just for her mortgage. Every pay, she has half of her mortgage payment deposited into that account (you could also set up an auto transfer if you’re not able to split up your direct deposit), then she has the payment come out once a month. But since we get paid 26 times a year, she ends up with extra money in the account which she uses to make a principal payment at the end of the year. I’m thinking you wouldn’t save quite as much interest this way since you are waiting until end of year to make a lump sum payment, but it’s still something.  

Answer 8

Our mortgage company won’t allow us to. We have a separate checking account (which at first our bank didn’t want to open for us). On payday we transfer 1/2- rounded up and our mortgage is set on auto payment. Since we round up we will have a bit extra at the end of the year; I plan on tossing that at the principal at the end of the year. Won’t be much extra, but it’s still extra.  

Comments

This is what we do with our car payment too.  

Answer 9

We have ours automatically deducted bi-weekly which pays an extra payment a year. We did this from the beginning so it knocked down about 6 years off our original 30 year mortgage.  

Answer 10

We asked for a weekly mortgage payments since we bought our house. We are due to renew our mortgage in a few months and hope the keep the weekly payments

Answer 11

Our original mortgage let us pay weekly and applied the payment as it came in. Our current one allows bi-weekly, but does not apply until the full payment is received (lame).  

Answer 12

We did bi weekly accelerated for the first 5 year term of our mortgage. It was hard with being on leave 2x with babies but we have survived. We are changing back to monthly for the next 5 years and put the difference to our line of credit. It was totally worth it as we cut a ton of interest off. And we are now done to 17. 5 years instead of 20.  

Answer 13

I tried with my bank. They allowed to do separate payments but they will put my payments on “hold” until the end of the month. I would then be responsible to call and tell them “please release my payments and apply it to my mortgage account”. Which I didn’t want to do. So now I just transfer my budgeted mortgage payments to a separate savings account until I’m ready to pay off in full at the end of the month

Answer 14

We can only pay once per month, too, but I pay extra and indicate how much is going to principal and how much goes to escrow

Answer 15

Some lender will offer a change from monthly to 2x per month with a fee. then after few years they will cancel it and you will return to monthly payment. they are very wise. that happened to me

Answer 16

It equals out to be about an extra payment every year, so just divide your payment by 12 months, and add that amount to principal every month when you pay your mortgage. Be sure to specify "additional principal" and the amount of it.