Last week I was talking with my account manager about our mortgage. Actually, we have a by-weekly accelerated mortgage (fixed/closed for 5 years). Means that every 14 days we’re paying our mortgage. To make things easy to understand: If you have a by-weekly accelerated mortgage, every 14 days you’re paying your regular amount AND at the end of the year, I’ve paid one extra monthly payment (instead of, say, monthly payments…)!
We’re accelerating our payments and hopefully we can have our house paid off in less than 20 years. However, she explained to me that I can also double up my payments!
What is a “double up” payment?
Double up is an additional payment of our mortgage. These extra-payments are applied to the principal only and reduce our mortgage balance. You should check with your financial institution the options that you have available once you sign your mortgage agreement. In our case, we’re paying the regular amount every 14 days, and in addition to that, we have setup an automatic withdraw from our account as well (this is the double up).
Think about this – withdraw $50 dollars from your account every 14 days and check the difference it will take. Wanna play with the numbers? Use the RBC mortgage payment calculator or use the right side column to search this blog/internet for free mortgage calculators.