Many of us don’t get the best value for our mortgage money. For most of us, mortgages take the majority of our wages; for this reason we need to shop around for the best deal and many of us don’t.

The usual scenario is that we go into a bank, ask how much the rate and repayments will be to borrow a certain amount of cash to buy a house over a certain number of years.

The bank’s rate will fluctuate as they base their calculations on the current bank rate. However, a fixed rate will lock your rate in for a set term, once you and the bank have agreed.

The rate will also vary slightly depending on the length of the term i.e. a one year, three year or five year term usually offer minimal differences in their rate.

Most of us do not realize, and are not told, (why?) that we could save ourselves at least ten per cent of our total interest costs according to the type of mortgage repayment method that we choose.

Since many of us have never been offered this choice, we need to understand a little more about mortgage repayments to see if we can aspire to saving ourselves $16,000 in interest payments over a $100,000 mortgage. That is alot of your cash going into the bank’s pocket instead of yours.

When we buy a home with a standard mortgage, we end up paying approximately double for it – depending on terms, interest rates etc. For instance, to borrow $100,000 at 5.75% interest rate amortized over a twenty five year period, we may pay back over $187,000. This is because the ‘fee or interest ‘ to borrow $100,000 for all that time has cost us $87,000. Fair enough – maybe.

We pay this back at the rate of $625.00 per month for 25 years. This makes sense for those of us who get paid monthly i.e. one paycheck at the end of each calendar month, a calendar month being approximately four weeks plus two days. However, many of us in North America get paid every two weeks i.e. bi-weekly.

Bi-weekly pay means that we do not receive 12 paychecks a year as we would if we were paid monthly, neither do we get double that (24 paychecks per year.) We actually get a pay check 26 times a year. This is because there are 52 weeks in the year, and if you split this into two weekly pay periods – they number 26.

If we paid our mortgage on a bi-weekly repayment schedule, we would be making a payment every two weeks instead of one payment every month. Therefore, we would be paying the equivalent of an extra one month’s installment a year – every year. This would pay off our mortgage more quickly which would equal less interest, the savings of which should go into our pockets.

Here is an example using the same $100,000 and the same interest rate of 5.75% amortized over the same 25 years. Instead of paying $625 per calendar month, as above, we will be paying $312.52 (half of $625) per every two weeks.

The bank could then calculate that our loan will be paid off in 21.1 years; an amortization period of 21.1 years (instead of 25). This would mean that we will only be charged $71,300 interest. This means that we will be saving $16,397 for our own pockets AND finishing paying for our home five years earlier.

You just need to take two steps to benefit from reading this: Make the magic request to your Bank Manager for: Bi-Weekly Rapid Mortgage Repayments and get bigger pockets!

Due to the fact that there is a huge amount of competition in the mortgage lender market, there are now several advantages to the consumer that did not exist a number of years ago. If your mortgage loan has been running for a good number of years then chances are you may not have gotten the financial product that suit your needs bests.

With all of this competition, there’s never been a better time to look at refinancing your home and perhaps finishing up with a better set of conditions or a better rate than you got when you originally took at your mortgage. There are a number of things that you should bear in mind when looking into this. Firstly, if you have been making regular mortgage repayments for a number of years then you will have built-up a reasonably good credit rating on the back of this. Also, if you don’t have any other outstanding debt in terms of additional loans or short-term credit then your credit rating should be excellent. This will be an excellent bargaining chip in terms of talking to mortgage brokers or directly to companies and being able to negotiate a lower rate and better conditions for your refinancing needs.

If you require additional money for home renovation or extension then there is also an opportunity here to build that additional money into your refinancing request and then spread it out over the longer term as part of your renegotiated mortgage.

Probably the first place to look is your existing company. Their financial product will have changed with the times and when you consider changing the terms of your mortgage then this is probably the first place that you should look. Because you’ve already built-up a relationship with them and have been paying regularly over an extended period of time they will be quite keen to keep you as a customer. This is a massive advantage in your negotiations with them and will allow you to leverage better conditions from the deal.

Also, it is no harm to shop around at this stage and see what other companies might offer you. You will also be able to use this information in the negotiations with your existing company and play one off against the other. If your existing mortgage financier is unwilling to offer you a competitive deal compared to what seems to be available in the marketplace than it is time to look at making a change. There has been all sorts of legislation in this area which will allow you to make this change quite easily. It has always been in the interest of the mortgage lenders to make it appear that changing from one mortgage lender to another is very difficult. This is actually not the case of when you look at this more closely will find that it is actually quite easy to change from one company to another.

Basically, the moral of the story is to always remember that the market is very competitive and if you have built up your equity and credit rating by keeping up regular repayments over a number of years that this puts you in a prime position to renegotiate your mortgage financing with your existing company or if they are unwilling to offer you the best terms then you can move to a different mortgage finance provider.