Do you know that you may save a lot of time and money by paying your monthly mortgage on a biweekly basis instead of a monthly basis? Our biweekly mortgage calculator with extra payments excel Template will help. When we take out and pay back a loan with a longer repayment period, such as a mortgage, most of our payments go toward the interest on the loan. Therefore, we will save a significant amount of money and a lot of time if we can pay a fair earlier portion of the principle (while the loan is still in its early stages).
Comparison of twice every month vs. once per month
The term “bi-weekly” refers to a time frame of 14 days. If you choose to make payments on the loan bi-weekly, the total number of payments you will make in one year will be 26 (26 payments multiplied by 14 days equals 364 days). If you choose to pay based on the monthly plan, you will make payments 12 times every year.
Therefore, regular bi-weekly results in 26 payments throughout the year. However, if you want to make payments biweekly, your total number of payments will be 24.
How To Use biweekly mortgage calculator with extra payments excel Template?
First Repayment Schedule (Years): This is the initial repayment schedule for your loan. In the case of mortgages on homes, the loan term is often between 20 and 30 years.
Enter the number of years left on your loan in the space designated for “Remaining Years” if you have previously made some payments but now want to begin making extra payments. After the year you will enter, your Extra Payment will be calculated if you have any remaining balance. For example, imagine that you have already paid payments on your 30-year mortgage for the last two years. However, you have decided that it is time to begin making Extra Payments on your loan so that it may be paid off more quickly. Therefore, put in 28 years of experience in this industry. This field will only accept values greater than one.
Original Amount of the Loan: Enter the initial amount you were given for your loan.
This is the Nominal Interest Rate, often known as the Annual Percentage Rate (APR).
Enter the date of your loan in the format mm/dd/yy. This is the date from which your interest will be computed.
Type of Payment: There are two different payments: the beginning of the period and the end of the period. Pick the one that you think would be best for your budget. In the case of mortgage loans, payments are typically processed after the allotted period.
The general rule is that interest is compounded monthly if payments are made every month when the frequency of interest compounding. Interest is compounded every two weeks for customers who make payments every two weeks. On the other hand, this is a specialist calculator. Individuals interested in splitting their monthly payment into two halves and doing it twice every month may use this calculator (after every 14 days). Therefore, the following interest compounding frequencies are the only ones that are permitted: monthly, bimonthly, quarterly, semiannually, and annually.
The Additional (Repeated) Amount That You Plan to Add: This is the supplementary amount you wish to contribute on a recurrent basis every two weeks. If your Remaining Years are 28 years and you enter a value in this section (Extra Amount), you will continue to pay this extra amount for the remaining (bi-weekly). Just check out the total amount of interest you’ll save by contributing 20–25 dollars every two weeks. The amount of interest and time savings is incredible.
Extra Payment (Irregular): This column may be found in the first Excel template (on the left). This is the field where you will enter the payment information for any additional money that you pay in addition to your regular and Extra Payments.
Therefore, these are the values that are being input. Only the blue area and cells should be used for entering your data. Not the same as other cells. They are inaccessible. Release the lock on the worksheet: The unprotected Sheet may be found within the Review tab’s Protect group of commands.
Method 1 Of biweekly mortgage calculator with extra payments excel
To compute the Due Bi-weekly payment, this Template uses the actual bi-weekly payment. The formula is as follows:
=PMT(apr/26, term*26,-loan,,1)
Here,
apr: The acronym “APR” stands for “annual percentage rate.” Original Loan Loan Conditions Expressed in Years: Original loan amount
Method 2 Of biweekly mortgage calculator with extra payments excel
Using this schedule, we split the monthly payment into two halves and sent the first of these payments after every two weeks and the second after every two and a half weeks. The formula is as follows:
=(PMT(apr/12, term*12,-loan,,1))/2
You will not be required to submit any Irregular Extra Payments into this Template. If you made any modifications to the first Template involving Irregular Extra Payments, the values you entered there will also be utilized by this Template.
Benefits Of Using biweekly mortgage calculator with extra payments excel
The most significant benefits of making payments every two weeks are accelerating the payoff of your home loan and saving a sizeable sum of money.
You decided to take out a loan for a sum of $275,000 over 30 years at an annual percentage rate of 7%. If you want to make payments every month, the total amount of your monthly planned payment will come to $1498.88. After 30 years of making your monthly payment, you will be responsible for total interest payment of $382618.14
If you break down the total amount of your monthly planned payment ($1686.88) into two equal parts, the result will be the amount of your bi-weekly scheduled payment, which is $843.10. If you make this payment exactly once every 14 days, the total amount you will owe will be reduced to $226,748.14. You will get a savings of $62,848.66. And you’ll have your debt paid off 5 years, 6 months, and 30 days sooner than you expected.
These additional rewards are earned in exchange for your sacrifice. To qualify for the monthly installments, you were required to make 12 payments, which would bring the total cost to $17,986.56. However, since this payment is made every two weeks, you will have to make 26 installments before the balance is paid in full. Therefore, the total amount you would pay over a year would be $19,485.44.
The additional sum is calculated as follows: $19,485.44 minus $17,986.56 = $1498.88
Therefore, you will need to make an additional payment of one month over one year, and this will provide you with all of the perks listed above (interest and time savings). Many individuals can make this additional contribution via their performance incentives, tax refunds, and the little amounts of money they save during the year. If you were to get a promotion at work or an increase in your earnings, it would be considerably simpler to pay off your home loan sooner.
Considerations
If you have your monthly payment set up to be paid automatically, you need to determine whether or not the payment may be canceled or altered. Make sure to get in touch with your financial institution to discuss the specifics of switching from a monthly to a bi-weekly payment schedule. Investigate the possibility of incurring pre-payment fees on the loan you have taken out. If you want to switch from making payments every month to every two weeks, certain banks may charge you a fee of several hundred dollars. But it was well worth it. If you switch from paying the bill every month to paying it every two weeks, you will save many thousand dollars. One thing you need to check is whether or not your additional payments or biweekly payments (if you make them) have been immediately transferred to your account.
Conclusion
If you want to pay off your home debt four to five years sooner, using the biweekly mortgage calculator with extra payments excel to make payments every two weeks is wise. But before you start making payments on your home loan, be sure that all of your high-interest credit card debt is paid off. Becoming debt-free, accumulating money for retirement, and establishing an emergency fund are wonderful accomplishments that should be counted as blessings. It will provide you with complete authority and independence in all aspects of life. Please use the comment box below to provide any feedback you may have on my biweekly Excel mortgage calculator.