Reduce Your Mortgage By Up To 8 Years Using Fortnightly Payments

 

You can reduce your mortgage on a standard 30 year term loan by 8 years just by changing from paying monthly to paying fortnightly.  By paying fortnightly you make 26 payments per year instead of 12 payments.  If you pay fortnightly this means that you make the equivalent of 13 monthly payments per year.  You pay more principle each year and you also pay less interest because the interest is only accumulated over two weeks before a payment is made, instead of over one month.  Your principle amount reduces much quicker so you waste less money on interest.

 

Example

If you have a $300,000 loan at 8% interest on a 30 year loan term you would save over $154,000 and 8 years over the term of the loan. 

 

Note: Your bank or financial institution will not volunteer this information.  You will need to specifically ask to make fortnightly payments.  Make sure your lender will accept fortnightly payments and will calculate the loan interest based on fortnightly payments.

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