I was told by friends that if I pay every two weeks instead of once every month, my mortgage would be paid off faster, Is this true? I am presently paying $2071 per month on a 20 year mortgage at 7%. How long will it take me to pay it off if I inject another $500 per month?
Not knowing how many payments you have already made, it can only be assumed that you're starting from scratch. A mortgage with a monthly payment of $2071, a rate of 7% and 240 monthly payments would start with a balance of approximately $267,000.
If you increased the monthly payment by $500, the loan would be paid off in 161 months, or a little under 13-1/2 years. That assumes you increase your regular monthly payment to $2,571. The timing of your extra payments could affect the outcome.
It's sometimes interesting to play with loan numbers. We have more than twenty different financial calculators on our Banking Tools page.
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Not knowing how many payments you have already made, it can only be assumed that you're starting from scratch. A mortgage with a monthly payment of $2071, a rate of 7% and 240 monthly payments would start with a balance of approximately $267,000.