My bank says I can reduce my mortgage by paying half of it every two weeks instead of the whole amount every month.
Can you explain how this works?
Answers | 1
Great question! Most of the world pays their mortgage every month, i.e., 12 payments. However if you split that into a payment every 2 weeks, you get 26 "half payments" and have thereby made at least one extra mortgage payment for the year. This helps reduce your principal at a faster rate. Good luck!