Hi there,
I was advised by a friend that I should look into the possibility of moving my mortgage payments to a fortnightly basis if my bank will facilitate this.
Their reasoning is that as interest is accrued daily that by making more frequent payments on the principal it will effectively stifle the interest which is accruing each month.
I am also aware that moving to fortnightly would effectively trigger me to make 13 payments a year instead of 12 which would also postively impact interest over the length of the mortgage however this could also be done by making one lump sum overpayment a year. So I a, specifically focusing on whether there is a true benefit in the longterm in paying my mortgage in two payments per month to mitigate monthly interest rates or whether the impacts would be neglible at best.
(If any bank would even allow this)
Current situation:
Mortgage: 300,000
Term: 30 Years
APR: 2.55% Fixed for 5 years (I would imagine I could only consider a forthnightly approach after the fixed rate has concluded and moved to variable)
Thanks for your time and insights.
I was advised by a friend that I should look into the possibility of moving my mortgage payments to a fortnightly basis if my bank will facilitate this.
Their reasoning is that as interest is accrued daily that by making more frequent payments on the principal it will effectively stifle the interest which is accruing each month.
I am also aware that moving to fortnightly would effectively trigger me to make 13 payments a year instead of 12 which would also postively impact interest over the length of the mortgage however this could also be done by making one lump sum overpayment a year. So I a, specifically focusing on whether there is a true benefit in the longterm in paying my mortgage in two payments per month to mitigate monthly interest rates or whether the impacts would be neglible at best.
(If any bank would even allow this)
Current situation:
Mortgage: 300,000
Term: 30 Years
APR: 2.55% Fixed for 5 years (I would imagine I could only consider a forthnightly approach after the fixed rate has concluded and moved to variable)
Thanks for your time and insights.