The important thing about dividing monthly payment into weekly payments is that the principal gets reduced weekly, instead of and more quickly than monthly, which in turn makes the interest less, as the interest is then based on that lower amount each time. Yes, it makes a HUGE difference. Don’t take my word for it. Do it and find out for yourself. I am amazed at the timidity of people to do something so very simple and effortless that will shave years and years, or decades in my case, off their mortgage in the most painless way I know of. I think it’s because they haven’t been ‘told’ to do it by the ‘experts’. And of course paying chunks is good too as that will make the principal less which in turn makes the interest less, which then makes the term shorter. Folks, this is basic math!!
The question to ask, is why the media and govt and money experts and rich people don’t tell the masses this. They get paid to give stupid ‘tips’ we all already know. ‘Live beneath your means. Divide risk between safe investments and risky investments. Pay yourself first (savings). Pay debt with highest interest rate first’ 🙄 we already know all that.
They never give specific truly great and simple tips like divide monthly mortgage payment into weekly payments. We little people without accountants and connections just assume the monthly is the norm, because it is presented to us that way, and so the thought doesn’t enter our head that there’s anything we can do about it.
And you’ve got people posting these scholarly sounding articles by our betters who admonish us to not pay off our mortgage. ‘Far better to do this that and the other and continue paying gigantic interest payments for decades.’ Think.
There are a lot of things they don’t tell us that they keep to themselves. They like being in superior positions to the dirty masses. While pretending to be humanitarians but imposing restrictions on us that they exempt themselves from. And they make money off our paying monthly (like mortgage companies). I do wonder why even the seemingly well intentioned people who claim to want to help and advise us, like Dave Ramsey whom I actually otherwise admire, don’t tell us this. None of them do.
The only reason I know about it is because a few years into my first mortgage, there was advice going around for a short while (it seems that particular good advice is absent on purpose nowadays), to pay biweekly so I changed to that (had no idea that weekly was possible). I discovered to my joy somehow we were paying our mortgage off significantly faster and just due to that and indeed paid off a 30 year in 13 years. I was young and naive and simply didn’t realize that it would make that big of a difference. Or else everybody would be talking about it, right?
Then when we bought our second house, the monthly was kind of high, and I was already used to biweekly, so I thought, it’d be easier budget wise if we could divide it further into weekly, so I asked our mortgage lender to divide monthly into weekly. Of course that paid it off even faster. Again, I didn’t realize at first just how big a difference it made going from biweekly to weekly. So that is how I stumbled onto the most fantastic and best financial decision I ever made in my life. My husband and I consider that one decision we can be proud of among all the mistakes we’ve made.
I bet if everybody started doing it, they’d change the rules (that they are careful to not make us aware of) on us. So I suggest you get on it asap.
Call your mortgage lender and say ‘I want to divide my monthly mortgage payment into weekly payments.’ That’s it. Ask for an amortization schedule and also your online account will keep track of your principal so you can actually work out the approximate date when you’ll pay your house off early. I was pleased to be a year off though in my estimation. We paid off our second house (30 yr mortgage) in 9 instead of 10 years. If I can do this, a person with no financial savvy whatsoever, anybody can.
If the mortgage rules are different where you are, then there might be a cap on what you can pay, or penalties or paying off debts early etc. We don’t have those unfair and exploitative limitations here in USA, at least not yet. Everything is hurtling leftward at warp speed.
I have nothing to gain by sharing my experience except to help people like me whose dream is to own their own home and a bit of land without going broke or paying thousands in interest when you don’t have to (unless your preference is for renting an apartment depending on where you want or need to live, walkable location, employment, etc). Obviously I can’t cover all possible living arrangements in one post, I just know someone will start lecturing me on the exceptions as this is mn.