|
When you set up your mortgage payment repayment plan, you can choose between a standard repayment plan or a bi-weekly repayment plan. With the standard plan, it would take you 30 years to repay the loan while a biweekly plan will take 24 years and 1 months. This will save you 5 years and 11 months. But, the savings doesn't end there. If you took out a $350,000.00 loan with an interest rate of 6.500% and your federal tax rate is 26.000%, you can expect to pay $2,212.24 per month, while a bi-weekly payment plan will call for a payment of $1,106.12 every other week. As a result, you will pay only $342,167.99 in interest with the bi-weekly schedule rather than $446,405.71 with the standard payment plan. While this will result in a loss of $27,101.81 in tax benefits, you will still save a total of $77,135.91 with the bi-weekly plan.
|