Mortgages and Amortization 41
BEAR-CH1.DOC BA Real Estate Guidebook Jackie Quiram Revised: 09/28/99 1:16 PM Printed: 09/28/99 1:16 PM
Page 41 of 36
Making bi-weekly payments instead of monthly payments
allows you to pay off a loan more quickly and thus reduce
the amount of interest paid. This is because the payments
are more frequent and you are making 13 full monthly
payments annually instead of 12.
For example, consider a $115,000 loan at 8% for 30 years.
The monthly mortgage payment would be $843.83.
Compare that payment to the payment for the same loan if
you elected to pay off the loan with bi-weekly payments of
$421.91. The loan would be paid off in less than 23 years,
and you would save $54,498 in interest.
Benefits of
Bi-weekly
Payments
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