Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Posting-Version: version B 2.10.2 9/5/84; site tove.UUCP Path: utzoo!watmath!clyde!burl!ulysses!allegra!mit-eddie!think!harvard!seismo!umcp-cs!tove!pds From: pds@tove.UUCP (Dave Stotts) Newsgroups: net.consumers Subject: more strange mortgage info Message-ID: <356@tove.UUCP> Date: Tue, 19-Nov-85 10:38:48 EST Article-I.D.: tove.356 Posted: Tue Nov 19 10:38:48 1985 Date-Received: Thu, 21-Nov-85 04:39:55 EST Distribution: net Organization: U of Maryland, Laboratory for Parallel Computation, C.P., MD Lines: 39 By now we all should realize the way that the bi-weekly mortgage payments shorten the payback period, i.e., by causing 13 monthly payments per year. When I first heard of such things, I tried a few mortgage calculations to see how much can be saved by making semi-monthly payments, and saving the 1/2 month interest on the little bit of principal paid the first half month. Here are the results... I have elided the middle of the amortization tables since the bottom line is the important one. I was surprised at the trivially small savings: $85 over 30 years! Dave Stotts Univ. of Maryland Computer Science ===========================monthly payments============================== $90,000 at 12%, 30 years, 12 payments per year monthly p&i: 925.75 period period cumulative cumulative year interest principal interest principal 1 897.02 28.73 10782.42 326.59 2 893.38 32.37 21523.43 694.60 . . . 29 112.33 813.42 242580.87 79580.60 30 9.17 916.59 243270.48 90000.00 ========================semi-monthly payments============================== $90,000 at 12%, 30 years, 24 payments per year semi-monthly p&i: 462.76 period period cumulative cumulative year interest principal interest principal 1 448.45 14.31 10781.73 324.47 2 446.63 16.13 21522.20 690.19 . . . 29 54.25 408.51 242520.86 79558.85 30 2.30 460.46 243185.91 90000.00 ============================================================================