Are there any marked benefits to pay per week
rather than the month?
The answer is: NONE!
A weekly payment involves dividing the payment
required by 52 rather than 12. For example, let’s take a
mortgage loan whose monthly payment is fixed at $ 945.47.
The weekly payment would then be $ 218.19. At the end of
year, the refund will have been the same as the one made
monthly payment of $ 11,345.64.
There is also the accelerated weekly payment. This one
divide the total annual payment by 48 (12 months x
4 weeks) rather than 52. Again according to our example, the
weekly payment in this case would be $ 236.37. Total
paid at the end of the year will be $ 12,291.11, or $ 945.47 more
only in the first scenario that will be allocated to the loan capital.
Naturally, the payment being higher, the refund
is done faster. You can achieve the same result
by simply increasing your monthly payments. It is
it is important to note that the interest of a mortgage is
calculated on a semi-annual basis, whereas for the others
types of credits, the calculation of interest is monthly.
In conclusion, pay the same annual amount for the week
or at the end of the month and you will finish paying your
mortgage. However, as demonstrated in a forthcoming
chronicle (see page 54), we believe that it is not advantageous
to pay your mortgage faster, the rates
mortgages are always lower than those of credit cards
or even investment income. It would therefore be more advantageous
to allocate this additional amount to current expenditure.
Is there an advantage in taking out a loan
mortgage that may have separate decapital tranches?
When a need for additional funds is felt, a
new tranche of capital can be obtained without having to
refurbish. This option avoids
penalty fees and / or the need to proceed to obtaining a
weighted rate. A new mortgage tranche, if it is used for
investment, can facilitate deductions during preparation
your tax return. It is recommended, however, to make sure that each
terms of the different tranches matures at the same
time. In fact, in the event of a shift, when one
of them will expire, a penalty on the other slices
will have to be paid in order to transfer your loan to another
lender. In order to avoid this penalty, you will need to renew your
loan with the same institution, without the power to negotiate
Only some fnancial institutions offer this product.
For more information, consult your mortgage broker