Mortgage Payments

[argos]

Anyone here making their mortgage payments on weekly basis?? Is it a smart move??


I switched from monthly mortage payment (P+I = $850/month) to weekly payments (P+I= $240/week --> $960/month)....but for some reason, if i make weekly payments, i'll end up paying more than my previous monthly payments (per month). Is this normal???

my amortization went from 420 to 208 months, does this sound about right??

 

[cabbagetowner]

Anyone here making their mortgage payments on weekly basis?? Is it a smart move??


I switched from monthly mortage payment (P+I = $850/month) to weekly payments (P+I= $240/week --> $960/month)....but for some reason, if i make weekly payments, i'll end up paying more than my previous monthly payments (per month). Is this normal???

my amortization went from 420 to 208 months, does this sound about right??

it should work out to 1040/month

 

[lxmoss]

It absolutely makes sense. It's a great time to be on a variable rate mortgage.

I'm paying $840/week trying to pay down my mortgage as fast as possible.

 

[416er]

Payment frequency

Your ammortiation is lower, so no need to worry!

Hopefully, you're on variable? My interest rate is gonna go down to 2.9%!

 

[argos]

it should work out to 1040/month

ya, the numbers are not exact. i'm just want to understand why my weekly payments come out to more than my monthly payments each month.

Before my switch it shows:

Remaining AM Period (in months) contracted 420 Actual 257

After my swtich it shows:
Remaining Actual AM period (In months) 208

What does the Actual Mean that was showing before my switch????

 

[cdr108]

ya, the numbers are not exact. i'm just want to understand why my weekly payments come out to more than my monthly payments each month.

Before my switch it shows:

Remaining AM Period (in months) contracted 420 Actual 257

After my swtich it shows:
Remaining Actual AM period (In months) 208

What does the Actual Mean that was showing before my switch????

It sounds like you originally signed up for a 35 year amortization; however, the payments equated to a 25 year amortization.

By accelerating your payments from monthly to weekly, you are effectively paying 13 vs 12 monthly payments each year. This ends up decreasing your amorization from 25 years to 21 years.

It's a great way of decreasing the term of the mortgage and you pay $10,000s less in interest.

 

[ducati0000]

weekly payment is the best way to pay down a mortgage quickly....if you can pay a extra $10,000 a year at a lump sum payment towards a 25 year mortgage and it quickly becomes a 17 year mortgage....

 

[argos]

in my case, it went from 35 years to 17.3 years (changing payments from monthly to weekly)

does this sound right?


i was told that there may be an error/typo when the lender went to make the changes (accidentally hit an extra .0).

 

[Flux Capacitor]

http://www.urbantoronto.ca/showthread.php?t=7881

 

[cdr108]

argos, from what you posted, it looks like you still have 17 years left.

When did your mortgage start?
Going from 35 to 17 years is not impossible, but highly unlikely.

As previously noted, tt sounds like you originally signed up for a 35 year amortization; however, your payments equated to a 25 year amortization.

 

[taal]

So would you go variable or fixed now ... for fixed it's probably as low as it'll go.

When would you lock in if you pick variable?

 

[rbt]

So would you go variable or fixed now ... for fixed it's probably as low as it'll go.

When would you lock in if you pick variable?

I'm much happier with what I locked in at a few years ago than the fixed or variable rates are today.

A new mortgage today? I would ask to split it in 2 parts. Lock the first 50% in at 5.25% (ING 5 year rate) and the other 50% to be variable.

I doubt prime will drop again but if it does I'll keep the other 50% free to be able to lock it in later. If you keep your first and second mortgage with the same bank, and are a good client, you *may* be able to get their best rate on your second mortgage.

 

[TrickyRicky]

My variable rate will now be ridiculously low. Moving forward the real issue at hand will be what happens when mortgages come due?

Financing will also start to become a bitch. Residential principle residence home buyers are somewhat politically protected from outrageous abuse by lenders, but investors and commercial borrowers are definately not. Some large lenders like Scotia Bank are saying outright that they are not particularly interested in lending at all. A successful mortgage broker I know said he is only handling a few mortgages a month now and he is seriously considering quiting the business altogether. It's going to be a desert out there in 2009 even if rates go to zero.

 

[nfitz]

Hopefully, you're on variable? My interest rate is gonna go down to 2.9%!

Bank Prime is now at 3.5% (it would have been at 3.25% but the Banks didn't follow the Bank of Canada's lead, and only dropped interest rates 0.5% instead of 0.75%.

Until a few months ago, you could normally get a variable mortgage from the big banks for prime minus 0.9% (prime minus 0.75% was advertised openly at Royal through 2006, 2007, and into at least early 2008); I see they are advertising prime plus 0.8% now - yikes!), if you pushed them a bit, your credit-rating was good, and you had 25% down. I've even heard of prime minus 1.0% - though I could always beat them down to prime minus 0.9%, I could never get any lower.

So I'm at 2.6% now, as are a lot of people. If I could lock in at 2.6% I'd do so happily ... but I really don't think the banks will go for that. I'm very glad to have a variable rate mortgage. I couldn't have locked in at any time recently for much below 5%, so I'm saving about $6,000 a year on a $250,000 mortgage.

 

[rbt]

So I'm at 2.6% now, as are a lot of people. If I could lock in at 2.6% I'd do so happily ... but I really don't think the banks will go for that. I'm very glad to have a variable rate mortgage. I couldn't have locked in at any time recently for much below 5%, so I'm saving about $6,000 a year on a $250,000 mortgage.

I get closer to $300 per month going from 5% to 2.6% at the beginning of the mortgage (25 year amort). Shorter amort. or a few years into payments and that difference decreases due (of course) to the smaller principal portion.

Anyway, you certainly made a great decision at the time you picked up your mortgage to go with the configuration you did. Hopefully you're not up for a forced renewal any time soon.