American Pacific Mortgage

Standard vs. Bi-Weekly

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Interest Rate : (%)
Length : (Years)
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Your Tax Rate
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Financial Analysis (Switch to Plain English)
  Standard Bi-Weekly
Length : 30 Yrs 0 Mts 25 Yrs 3 Mts
Time Saved : 4 Yrs 9 Mts
Bi-Weekly Payment : - $671.03
Monthly Payment : $1,342.05 $1,453.89
Total Interests Paid : $233,139.46 $189,734.44
Interest Savings : $43,405.02
Tax Savings : $60,616.26 $49,330.95
Tax Saving Losses : $11,285.31
Total Benefit
(Int. Savings - Tax Saving Losses) :
$32,119.72
Plain English Help (Switch to Financial Analysis)

When you set up your mortgage payment repayment plan, you can choose between a standard repayment plan or a bi-weekly repayment plan. With the standard plan, it would take you 30 years to repay the loan while a biweekly plan will take 25 years and 3 months. This will save you 4 years and 9 months. But, the savings doesn't end there.

If you took out a $250,000.00 loan with an interest rate of 5.000% and your federal tax rate is 26.000%, you can expect to pay $1,342.05 per month, while a bi-weekly payment plan will call for a payment of $671.03 every other week. As a result, you will pay only $189,734.44 in interest with the bi-weekly schedule rather than $233,139.46 with the standard payment plan. While this will result in a loss of $11,285.31 in tax benefits, you will still save a total of $32,119.72 with the bi-weekly plan.

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