Weekly Mortgage Payments

Check that one off my list: yesterday I called the bank and set up weekly mortgage payments.

We were paying every two weeks, which is still more advantageous than once or twice a month, so now we'll save even more interest. (The difference between bi-weekly and weekly is not as great as the difference between monthly and bi-weekly, but it's still savings :)

Here's a mortgage calculator so you can compare, and see how much money you would save:

http://www.invis.ca/calculators/CABiweekly.cfm



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Weekly Mortgage Payments

We're switching our mortgage from bi-weekly payments to weekly. Although this doesn't result in as much interest savings as shortening the amortization period would, it still helps by reducing more quickly the balance of the loan that the interest is calculated on.

I've heard that there are even daily mortgages available - interesting!! I'm skeptical that our bank would offer this, but I'm going to ask. I'll let you know what I find out...
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Three Ways To Save On Mortgage Interest

There are three easy ways to shave off some interest from your mortgage.

Because mortgages typically have a long amortization period, the interest really adds up. In the end, depending on the length of your mortgage and the interest rates, you may end up paying as much, if not more, in interest than the original mortgage amount.

Here are three simple things you can do to significantly reduce the amount of interest you will pay:

1) Principal only payments. Every financial institution has rules about how these can be applied (for example, there are minimum and maximum amounts, as well as yearly frequencies). A friend of mine recently put $3,500 towards her mortgage principal, and saved considerably more than that in interest.

2) Shorten your amortization period. Use this calculator to see what I mean.

3) Pay more frequently. If you are paying monthly, consider bi-weekly or even weekly. The sooner you can reduce the principal, the sooner the amount that the interest is calculated on is lowered.

Remember that interest is how banks make money - whatever you can do to reduce the interest you pay puts some of that money back in your pocket.
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Blend and Extend

My current question is whether or not to blend and extend our mortgage. It's usually done if interest rates go down, and mortgage holders want to capitalize on lower rates.

At the moment our rate (5.75%, one year left) is lower than the average posted rates, but will these rates go up further as banks try to recoup losses with higher interest rates? OR... will rates go down as prime rate has, in an effort to stimulate the economy?

Is anyone out there contemplating the same dilemma? Any thoughts?