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Difference between Bi-weekly and Accelerated Bi-weekly

Difference between Bi-weekly and Accelerated Bi-weekly

What is the difference between bi-weekly and accelerated bi-weekly payments? The two payment methods have different implications for both employers and employees. Here we will break down the differences so that you can make an informed decision about which payment method is best for you.

What is Bi-weekly?

Bi-weekly refers to something that happens every two weeks. The term can be used to describe events, such as meetings or paydays, or it can be used to describe objects, such as magazines or payments. Bi-weekly is often used interchangeably with semi-monthly, although the two terms technically have different meanings. Bi-weekly means twice a week, while semi-monthly means every two weeks. However, both terms refer to something happening every fourteen days. In general, bi-weekly is the more common term, and it is often used in formal settings.

What is Accelerated Bi-weekly?

Accelerated bi-weekly is a type of mortgage repayment schedule. Under an accelerated bi-weekly mortgage, the borrower pays half of their normal monthly mortgage payment every two weeks. This allows the borrower to make 26 half-payments each year, which equals 13 full monthly payments. Accelerated bi-weekly mortgage payments can be a great way to save on interest and pay off your mortgage faster. Because you are making extra payments, you will reduce the principal balance of your loan more quickly. This can lead to significant interest savings over the life of the loan. Accelerated bi-weekly payments can also help you build equity in your home more quickly. If you are considering an accelerated bi-weekly mortgage, be sure to speak with your lender to see if it is the right option for you.

Difference between Bi-weekly and Accelerated Bi-weekly

The Bi-weekly and Accelerated Bi-weekly mortgage terms are the two most popular repayment frequencies for Canadian homebuyers. As the name suggests, Bi-weekly payments are made every two weeks, while Accelerated Bi-weekly payments are made every two weeks but with a higher payment amount. The main difference between these two repayment frequencies is the time it takes to pay off your mortgage. With Bi-weekly payments, you will be able to pay off your mortgage in 26 years. However, with Accelerated Bi-weekly payments, you will be able to pay off your mortgage in 24 years. This is because Accelerated Bi-weekly payments apply an extra payment towards the principal balance of your mortgage each month. As a result, you will save money on interest and pay off your mortgage faster.

Conclusion

It is important to understand the difference between bi-weekly and accelerated bi-weekly payments in order to make the best decision for your business. Accelerated bi-weekly payments can save you money on interest, so if you are able to afford the higher payment amount, it may be a wise choice for you. Bi-weekly payments are more common, but they do not always offer the best value for your money. Make sure you consider all of your options before choosing a payment plan for your business.

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