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When you set up your mortgage payment repayment plan, you can choose between a standard repayment plan or a bi-weekly repayment plan. With the standard plan, it would take you 25 years to repay the loan while a biweekly plan will take 21 years and 9 months. This will save you 3 years and 3 months. But, the savings doesn’t end there. If you took out a $175,000.00 loan with an interest rate of 5.000% and your federal tax rate is 0.000%, you can expect to pay $1,017.81 per month, while a bi-weekly payment plan will call for a payment of $508.90 every other week. As a result, you will pay only $111,516.97 in interest with the bi-weekly schedule rather than $130,342.62 with the standard payment plan. While this will result in a loss of $0.00 in tax benefits, you will still save a total of $18,825.65 with the bi-weekly plan.
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