Mortgage Calculator Monthly VS Weekly

Introduction

Choosing the right mortgage repayment frequency can significantly impact your financial strategy. The decision between monthly and weekly payments can affect your overall interest paid and the speed at which you pay off your mortgage. Understanding the nuances of a Mortgage Calculator that compares monthly and weekly payments is crucial for informed decision-making.

Formula:

The formula for calculating monthly and weekly mortgage payments differs due to the frequency of payments. For monthly payments, the formula is typically:

$P = ( 1 + r ) ^{n} - 1 P v \cdot r \cdot ( 1 + r ) ^{n}$

For weekly payments, the formula is adjusted based on the number of weeks in a year:

$P = ( 1 + r ) ^{n w} - 1 P v \cdot r \cdot ( 1 + r ) ^{n w}$

Where:

$P$ is the payment amount,
$P v$ is the present value of the loan,
$r$ is the interest rate per period,
$n$ is the total number of payments (months for monthly payments, weeks for weekly payments),
$n_{w}$ is the total number of weeks in a year.

How to Use?

Input Loan Details: Enter the loan amount, interest rate, and loan term.
Select Payment Frequency: Choose between monthly and weekly payment frequencies.
Calculate: Press the calculate button to obtain the corresponding monthly or weekly payment.

Example:

Let’s consider a mortgage of $200,000 with a 4% interest rate over 30 years.

Monthly Payment:

$P = ( 1 + 0.04 ) ^{30 \cdot 12} - 1 200000 \cdot 0.04 \cdot ( 1 + 0.04 ) ^{30 \cdot 12}$

The monthly payment is approximately $954.83.

Weekly Payment:

$P = ( 1 + 0.04 ) ^{30 \cdot 52} - 1 200000 \cdot 0.04 \cdot ( 1 + 0.04 ) ^{30 \cdot 52}$

The weekly payment is approximately $220.72.

FAQs?

Q1: Are weekly payments always cheaper?

A1: While weekly payments may seem lower, you make more payments in a year, resulting in a higher overall payment. Compare the total payments for accurate cost assessment.

Q2: Can I switch between monthly and weekly payments?

A2: Some mortgages allow you to switch, but it’s essential to check with your lender and understand any associated fees.

Q3: Which option is better for saving on interest?

A3: Making more frequent payments, such as weekly, can save on interest over the life of the loan.

Conclusion:

Choosing between monthly and weekly mortgage payments involves considering your financial preferences and goals. Utilizing a Mortgage Calculator that compares these options empowers you to make an informed decision based on your budget and long-term financial objectives. Evaluate the total cost over time and consult with financial experts if needed to ensure the chosen payment frequency aligns with your financial strategy.