Payment frequency refers to how often you make your mortgage payments. Lenders typically offer several schedules, ranging from monthly to accelerated weekly payments, each affecting how quickly you pay off the loan and how much interest you pay.
Common Options
- Monthly: One payment per month, the most common schedule.
- Bi-weekly: A payment every two weeks (26 payments per year).
- Accelerated bi-weekly: Like bi-weekly, but structured to make the equivalent of 13 full monthly payments per year, reducing amortization.
- Weekly: Payments are made every week (52 per year).
- Accelerated weekly: Like weekly payments but results in slightly more paid each year, helping pay off faster.
Why It Matters
The choice of payment frequency affects cash flow and total interest costs. Accelerated schedules allow borrowers to pay off their mortgage sooner and save on interest, while standard monthly payments offer simplicity and predictability.
Final Thoughts
Selecting the right payment frequency depends on your financial situation and goals. Borrowers who can handle smaller, more frequent payments may save thousands in interest over the life of the mortgage.