My friend told me about the person on the radio talking about saving thousands on your mortgage by paying twice a month instead of once a month.
I looked into it and set it up with boi to do this after a lot of phone calls and letters.
It came out then that the man said he made a mistake and took back everything he said.
I just wonder why he said this.
My mortgage interest rate was 3.1% on 260000 for 25 years, monthly payment of 1230 a month.
Now my payments are 595 twice a month at 3.1% on 260000 for 23 years monthly payment of 1190.
I have knocked 2 years payments of capital and interest of my mortgage and i am paying less than I was just because i rang boi on the back of what that man said.
I am also making up the differerence between the 1190 and the 1230(40 euro) and overpaying my mortgage each month. I am not sure how much time this will knock of my term but over 23 years its bound to help.
In my head I am getting a great deal but as I mentioned am I missing something and why is everybody not doing this.
I wish I could do it - Ulster Bank refuses to accept payments more regularly than monthly - I'd love to pay fortnightly cos that's how my pension is paid.
I wish I could do it - Ulster Bank refuses to accept payments more regularly than monthly - I'd love to pay fortnightly cos that's how my pension is paid.
If you are on a Standard Variable Rate mortgage then you can make one-off payments against your capital amount owing at any time during your term, which would save you interest over the years. #
Look into that. Its basically the same thing, although instead of paying every 2 weeks you might pay off 2 lump sums during the year after you save up a bit.
paying bi-monthly will have a slight benefit over monthly payments in a scenario where interest is accrued daily and capitalised monthly - most mortgages these days. One is paying the capital portion off, on average, 15.5days early and paying that little bit less interest as a result.
Using www.Jeacle.ie one can see the comparisons as per the OP:
Monthly 300k 30yr at 3.10% = 1281.05 per month
Fortnightly 300k 30yr at 3.10% = 640.52 per period, or 1387.79 fortightly and paid off 26yrs 5 months, this being better than the saving outlined by the OP.