Bi-Weekly Payments

Ed_Zep

Hi.

Was reading a book about how to be better with money and it recommended bi-weekly mortgage payments. It was an American book and I don't know if would apply to the UK.

By paying bi-weekly you make 1/2 your usual payment every two weeks, which means you make the equivalent of 13 monthly payments instead of 12.

Has anyone attempted getting their lender to go for this?

Lady1981

Hello,

Long time lurker here. (you can't see me but I'm waving!)

My mortgage is with the Abbey and I have asked them about bi weekly payments. They told me that they cannot stop me from making my payments on a bi weekly basis if I chose to do so. We haven't arranged it as yet but plan to when we have sorted out a couple of other atters.

If you look at the hsh amortization mortgage calculator it will tell you how much you will save over the term of the mortgage if you pay on a bi weekly basis. I think we will save about 8K and just under 2 years off our term!

Lady

Lady1981

Here's the link

http://www.hsh.com/calc-amort.html

Ed_Zep

Lady1981 wrote: »

Here's the link

http://www.hsh.com/calc-amort.html

Thanks Lady1981 and good luck on you MFW journey.

save-a-lot

Hi

Was interested in this thread and thought I would contribute, here is a good link... http://www.quote-engine.com/mortgage-payments-calculator.html - does similar, it does not break the payments down into a report, but does make it clear on the savings and gives a little explanation. On my current payments I would end my mortgage 22 months earlier by doing this.

Would not overpaying on a monthly payment plan have the same effect?

Floxxie

Ed_Zep wrote: »

Hi.

By paying bi-weekly you make 1/2 your usual payment every two weeks, which means you make the equivalent of 13 monthly payments instead of 12.

Has anyone attempted getting their lender to go for this?

No, I just overpay. Interest is charged daily and I can overpay as much as I want without a penalty.

For those who are with Abbey, ask them to increase your direct debit to a limit that suits you. As long as you don't pay off your entire mortgage before your deal runs out, there shouldn't be an issue with this. You then also have the additional 10% overpayment on top.

Floxxie

Ed_Zep

save-a-lot wrote: »

Hi

Was interested in this thread and thought I would contribute, here is a good link... http://www.quote-engine.com/mortgage-payments-calculator.html - does similar, it does not break the payments down into a report, but does make it clear on the savings and gives a little explanation. On my current payments I would end my mortgage 22 months earlier by doing this.

Would not overpaying on a monthly payment plan have the same effect?

The more I think about it the more I realise it's just as easy to overpay. It's not quite the same as monthly, as there are 52 weeks, 26 payments of 1/2, i.e. 13 payments. So it's effectively overpaying but in a way so you don't notice so much.

RosieTiger

too complex for me !

I just want to overpay and ensure that I do this as soon as my pay hits the bank to ensure it's working as quickly as I can get it to.

This also has the added effect of ensuring the OP has been made, rather than getting to the end of the month and seeing what's left. of course this is all dependant on your own circumstances but I go back to when I was 18 and had my first car. If bills needed paying on it, I paid straight away and then survived on what was left. Tried the other way round and never had the same figure available not surprisingly !

gallygirl

My 1st BTL mortgage with Yorkshire Bank (12 years ago) was daily calculated interest (something of a novelty then, it was called an Australian mortgage) and weekly payments. I loved it as tenant paid weekly & it all worked really well. I remortgaged to C&G about 4 yrs later for a better rate, still daily interest but monthly payments.

I feel nostalgic about YB mortgage. I wasn't into spreadsheets then.... what a wasted opportunity, think of all those entries

kazd

I assume though it would make no difference if you have an offset mortgage though because the money in your current account is offsetting the interest anyway.

Lady1981

I think that the advantage of bi-weekly payments is the interest saved over the term of the mortgage. Half of your usual monthy payment will be made two weeks early, cutting down the interest payable. Overpayments can then be made on top (depending on your lender) which means you can save twice! :beer:
Lady xx