When it comes time to making your mortgage payments, there are various options to chose from:
• Monthly
• Bi-Weekly
• Weekly
• Accelerated Bi-Weekly
• Accelerated Weekly

When you are completing your mortgage documents after the purchase of a home, you must select your payment option, but how do you know which to chose?

Here is a quick explanation of each option:
Monthly – This is one of the most common methods when your payment is withdrawn from your account the same day every month (eg the 1st or the 15th). You make 12 payments per year.
Bi-Weekly – This is another common payment method where the payment is withdrawn every 2 weeks. This works well for people who are paid on a bi-weekly schedule because you can line up mortgage payments with your paycheck. This is calculated by adding 12 monthly payments and then dividing by 26 pay periods. The total amount paid for the year is the same as a monthly payment.
Weekly – Similar to bi-weekly, this is the monthly payments added up for the year and divided by 52 weeks. The total amount paid for the year is the same as a monthly payment.
Accelerated Bi-Weekly – The monthly mortgage payment is divided by two, and then paid on a bi-weekly basis. The payment is slightly higher than the regular bi-weekly payment, and therefor the mortgage is paid off over a shorter period of time.
Accelerated Weekly – The monthly mortgage payment is divided by four, and then paid on a weekly basis. The payment is slightly higher than the regular weekly payment, and therefor the mortgage is paid off over a shorter period of time.

The accelerated payments are not that different from a regular payment, but you end up making roughly one extra mortgage payment per year which will provide a significant saving on interest payments and will allow you to pay your mortgage of potentially years early. There are also other ways that you can increase payments and speed up the process further.

If you have any questions or want some guidance with what choice to make, please reach out.