Is their anyway to determine which extra payment is going to the full primary 1st week or the 4th week? And if it’s the 4th payment couldn’t you pay like 100$ each week and on the 4th week pay the remainder to the full primary
I think people think if you pay more often, then the interest would be calculated based on a lower principal on the next payment sooner. But im guessing thats not how it works.. but then how does it work? If frequency doesnt matter, why dont i just pay a lump sum at the end of the year instead of making monthly payments assuming cash flow isnt a problem?
Seems like most people looking at these types of quick fixes focus on cutting costs around the margins. Short of it...... If they put that same effort or more into sustainably growing income/profit will end up much better off over time.
There can be if you have fixed your mortgage interest rate. Usually it’s if you pay off more than 5%. So if your mortgage was $500k and then you pay off more than an EXTRA $25k, compared to what you were going to pay anyway. If you are on a floating interest rate (like a revolving credit), there is no penalty.
Why did you divide month by 4? In accounting and finance we always use 4.333 since there are 52 weeks in a year…
Because he's an "economist"
Agreed
Fuzzy math😅
@3:30 he mentions this
Is their anyway to determine which extra payment is going to the full primary
1st week or the 4th week?
And if it’s the 4th payment couldn’t you pay like 100$ each week and on the 4th week pay the remainder to the full primary
I pay $200 per week extra on my morgage , it's going into my offset account is this going off my principal
Here in Canada, we can also do rapid weekly, rapid bi-weekly, it does make a difference
You guys are incredible! 😂 LOVE the show
I think people think if you pay more often, then the interest would be calculated based on a lower principal on the next payment sooner. But im guessing thats not how it works.. but then how does it work?
If frequency doesnt matter, why dont i just pay a lump sum at the end of the year instead of making monthly payments assuming cash flow isnt a problem?
What if you have an off set account? Does additional weeks payments still make a difference
any extra payment anytime (sooner the better) will make a difference as interest is calculated on a daily basis
Seems like most people looking at these types of quick fixes focus on cutting costs around the margins. Short of it...... If they put that same effort or more into sustainably growing income/profit will end up much better off over time.
Im thinking your buddy meant to say extra weekly payments on principal on top of regular monthly scheduled payments 😂
Is this working on compound interest
Is there a penalty for paying off the mortgage early?
There can be if you have fixed your mortgage interest rate. Usually it’s if you pay off more than 5%. So if your mortgage was $500k and then you pay off more than an EXTRA $25k, compared to what you were going to pay anyway. If you are on a floating interest rate (like a revolving credit), there is no penalty.
Haha he must of been twitching
quiet well explained