Mortgage Payment FortNightly?

Hi , We have a mortgage over 13 years and pay monthly - It is with AIB and at a tracker variable rate. I have read somewhere that I could save money on the mortgage by instead repaying fortnightly ? Have many people done this and does it make sense ?
Thanks

suzyann said:

Hi , We have a mortgage over 13 years and pay monthly - It is with AIB and at a tracker variable rate. I have read somewhere that I could save money on the mortgage by instead repaying fortnightly ? Have many people done this and does it make sense ?
Thanks

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If you pay forthnightly, you end up making 26 payments a year (52 weeks divided by 2) not 24 (12 months * 2).

It means your making accelerated payments (which is a good thing ) but it also means that the "savings" (on the total cost of the mortgage - reduced interest) are not simply coming from savings on interest by paying half your monthly payment two weeks early as could be assumed (search the forum and you can spot I did originally make that assumption).

If you can afford the extra payments then yes it makes sense. If you can afford further additional payments they also would save you on the total cost of your mortgage, but do be aware you will end up making higher payments per year as a result.

ok that makes sense and would work exactly the same way as by me paying off a sum of money off the mortage extra each year

suzyann said:

....would work exactly the same way as by me paying off a sum of money off the mortage extra each year

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Basically yes. It works on the exact same idea. Some additional savings may be made through paying a little early, but worth pointing out that additional payments are being made. You can check how making the additional payments manually would compare by using one of the online mortgage calculators.

Obviously the timing of payments is vital to what savings will be made (€100 this month would save me more than €100 paid off my mortgage in six months time [as I would be saving the interest on an additional six months payments with further reductions coming from these six months saved interest payments (even if they are small) nocking a further amount off the capital]).

I have an aib mortgage which I pay weekly. When I first got the mortage I told them that I wanted to pay weekly as I get paid weekly.

Thanks for the responses - Both myself and partner get paid monthly so will probably keep as is and try to put any extra money off as we have it - thanks