A mortgage payment frequency is how often money comes out of your bank account to pay your mortgage. There are a wide variety of frequency options available, so how do you select which is best for you?
I suggest to my clients, to opt for a payment schedule which reflects when they receive their paycheques and to have the mortgage payment date set for 2-3 business days afterwards. For example, if you are paid bi-weekly (26 times per year) on a Friday, opt for bi-weekly payments on a Tuesday. This is ideal, should there be a delay for some reason in payroll. But if you prefer it matches your payday that’s just fine as well.
When you make more frequent mortgage payments, you are paying more towards your principal, saving thousands in interest, and shortening the amount of time it takes to pay off your mortgage. The following table shows how a $1,000 mortgage payment is managed with four different types of payment frequencies.
| Frequency | Formula | Payments per year | Amount per payment | Total paid per year |
| Monthly | $1,000 / 1 | 12 | $1,000 paid monthly | $12,000 |
| Semi-monthly | $1,000 / 2 | 24 | $500 paid twice per month | $12,000 |
| Bi-weekly | $1,000 x 12 / 26 | 26 | $461.54 paid every second week | $12,000 |
| Accelerated bi-weekly | $1,000 / 2 | 26 | $500 paid every second week | $13,000 |
By making the accelerated bi-weekly payments, you essentially end up making two extra payments each year ultimately, saving thousands in interest and shortening the amount of time it takes to pay off your mortgage.
If you have any questions or would like to look at some numbers and how it pertains to your situation, feel free to reach out at any time – I would be happy to provide advice on how to best proceed.