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DeluxeXL t1_j1zbqhi wrote

It doesn't change interest or how soon you pay off if the payment amount per unit time is the same. Mortgages don't calculate interest constantly so it doesn't matter if you pay on 1/7/23, 1/14/23, 1/21/23, 1/28/23 instead of all on 2/1/23.

Lender simply expects the monthly bill paid by the due date. You can split required payment into multiple pieces on multiple days before the due date, or stay with one. If you pay extra, then the extra reduces principal for the subsequent monthly bills. Doesn't matter when inside the month you do it.

For example, if you split a $1000 bill into $250 pieces and pay weekly, then you'll be paying exactly as scheduled (not early, not late, and no extra payments) for most months. However, every year has 4 months with 5 weeks. In those 4 months with one extra week, the 5th payment is considered "extra payment applied to principal", reducing the duration of the mortgage.

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Iwanttosee25 OP t1_j1zcj92 wrote

Ah ok, didn’t know that, thought it was calculated constantly. So really the only way to shorten/pay less interest is making extra principle payments

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Default87 t1_j1zcv08 wrote

Correct. The reason that biweekly payments shorten the duration is that there are 26 biweekly payments in a year, so if you do half of your monthly payment each time, you are effectively making 13 monthly payments per year instead of 12.

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DeluxeXL t1_j1zcys3 wrote

Yes, you have to actually pay extra in the same month after the normal monthly bill is paid. See my edit for example.

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spammmmmmmmy t1_j1zh4ms wrote

I've got a Google Sheet that works well for me. It wasn't a quick process to get all the formulas working. Note, this worksheet is designed for analyzing the merits of selling a mortgage, not buying. YMMV.When sharing a Google Sheet URL on here previously however, I was warned that it allowed an uncovering of my Google identify.

https://docs.google.com/spreadsheets/d/1B_Tg0q_pokqSbSGNpynQHGosm7QUREf5Kg-KcbKxE5A/edit?usp=sharing

The above sheet is shared from a new, anonymous Google account. Please make a copy of it to enter your details.

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