Own Your Life

I can’t stress enough how important the accelerated bi-weekly payment is. By simply paying your mortgage every 14 days, as opposed to once a month, will knock off years from your mortgage, saving you thousands of dollars in unnecessary interest costs. We literally push all our clients towards this type of payment.

Here is where a different angle comes into play. If your budget can’t handle a bi-weekly payment, I would highly suggest that you don’t take that mortgage.

Book Suggestion

The Everything Homebuying Book: How to buy smart -- in any market..Determine what you can afford...Explore your mortgage options...Find a home that matches your needs (Everything Series)

This would be a clear indication that you are over-leveraged and that is the last thing anyone wants to do.

Just to be clear, here is a breakdown of how the accelerated bi-weekly payment works:

• Let’s say your monthly payment is $1,000 and is due on the first of each month.
• An accelerated bi-weekly payment splits that into two payments of $500.
• Each payment is now made every 14 days.
• Because there are more than 28 (14 x 2 payments) days in a month, you get an overlap.
• This causes you to pay one extra bi-weekly payment per year directly towards your principle.

To add metrics to my points, let’s say you have a $300,000 mortgage. Using an accelerated bi-weekly payment would knock off over 3 years of a 25-year amortization; you can imagine the interest savings would be shocking.

Please use an accelerated bi-weekly payment and again, if your budget can’t handle it, don’t take that mortgage.

Own Your Life,

Jessi Johnson

Vancouver Mortgage Broker