# 5.2.14 Payment options

Most lenders will let you choose from a variety of payment schedules, such as monthly, biweekly or weekly. If you choose a more frequent schedule, you'll save money, because your money will be applied to the principal sooner, and less interest will accumulate.

If you can afford an "accelerated" schedule, you can make significant savings on your mortgage interest. An accelerated schedule divides your monthly payments over a weekly or biweekly schedule so that you pay an extra monthly payment each year.

The table below shows the main payment schedule options. The example shows payments and the total cost for a mortgage of \$100,000 at an interest rate of five percent with an amortization period of 25 years.

Main payment schedule options
Payment frequency Description Payments Total cost

Monthly

One payment per month for a total of 12 in a year.

\$581.50

\$174,481.50

Semi-monthly (twice a month)

Two payments per month for a total of 24 in a year.

• With this option, the total amount you pay over the year is the same as with the monthly payment (monthly payment ÷ 2), but half of the payment is applied sooner.

\$290.65 twice per month

\$174,390.66

Biweekly (every two weeks)

A payment every two weeks.

• Since there are 52 weeks in a year, the total number of payments over the year is 26 (52 ÷ 2).
• This option keeps the total payment over the year the same as with the monthly payment (monthly payment x 12 months ÷ 26).

\$268.28 every two weeks

\$174,383.67

Accelerated biweekly

A payment of half the monthly payment every two weeks.

• Since there are 52 weeks in a year, you will make 26 payments a year (52 ÷ 2).
• With this payment frequency, you will make the equivalent of one extra monthly payment per year.
• You will pay off your mortgage faster and save in interest charges.

\$290.80 every two weeks

\$162,394.64

Weekly

One payment per week for a total of 52 in a year.

• The total annual payment remains the same as with the monthly payment (monthly payment x 12 months ÷ 52).

\$134.11 every week

\$174,341.73

Accelerated weekly

A payment of one quarter of the monthly payment every week.

• With this payment frequency, you will make the equivalent of one extra monthly payment per year.
• You will pay off your mortgage faster and save in interest charges.

\$145.40 every week

\$162,257.04

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