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1. Paul Sidhu says:

   September 23, 2009 at 9:32 am

   You’ll find that most lenders offer a variety of payment options. The most common are:

   • Monthly: Monthly payments mean you make a payment once a month totaling 12 payments a year.

   • Semi-monthly: Semi-monthly payments mean you make a payment twice a month totaling 24 payments a year. The amount you pay each time will equal half of your total monthly payment.

   • Bi-weekly: Bi-weekly payments mean you make a payment every second week, totaling 26 payments a year. To work out how much your bi-weekly payments will be you would take your monthly payment, multiply it by 12 (the number of months in a year) and then divide it by 26.

   • Weekly: Weekly payments mean you make a payment once every week, totaling 52 payments a year. To determine how much your weekly payments will be you would take your monthly payment, multiply it by 12 (the number of months in a year) and then divide it by 52.

   In addition you can choose to accelerate your payments. By accelerating your payments you will pay off your mortgage quicker and pay less interest in doing so. While you will still be making the same number of payments how, much you pay, when accelerated is a bit more than the non-accelerated version. It’s all in the math.

   Accelerated bi-weekly payments
   Instead of calculating your premiums by taking your monthly payment, multiplying by 12 and then dividing it by 26, with accelerated bi-weekly payments the calculation would be as follows: Monthly payment divided by two. The difference between the calculations can be best demonstrated with an example. Let’s say your monthly payment is $500.

   With non-accelerated bi-weekly payments you would pay the following every two weeks: $500×12÷26=$230.77
   With accelerated bi-weekly payments you would pay the following every two weeks: $500÷2=$250.00

   Accelerated weekly payments
   Instead of calculating your premiums by taking your monthly payment, multiplying by 12 and then dividing it by 26, with accelerated bi-weekly payments the calculation would be as follows: Monthly payment divided by two. The difference between the calculations can be best demonstrated with an example. Let’s say your monthly payment is $500.

   With non-accelerated bi-weekly payments you would pay the following every week: $500×12÷52=$115.38
   With accelerated bi-weekly payments you would pay the following every week: $500÷4=$125.00

   Paul Sidhu, Principal Mortgage Broker at KTX Financial.

   Neither Kanetix® nor the KanetixForum.ca is a mortgage broker or agent. Although this information has been passed along to you from KTX Financial through the Forum, we are not responsible for the opinions expressed by them. Mortgages can be complicated. When reading these answers, keep in mind each person’s situation is unique. Individual responses may vary depending on your lender, geographic location, and specific circumstances. If you have a similar situation, always speak with your mortgage provider, or a licensed mortgage representative, for terms and conditions that may apply to you.