Updated: Jul 13, 2023
Accelerating weekly or bi-weekly payments is a simple and cost-effective method to save on interest costs without making significant investments. It involves making an additional monthly payment each year, which is typically affordable for most individuals. By optimizing your debt planning and paying it off quickly, you can avoid the disadvantages of prolonging debt repayment, which only benefits the mortgage provider. This approach aligns with Islamic principles, which are clear about avoiding interest (riba) and managing debt responsibly. It is crucial to recognize that prolonging debt repayment goes against the recommended strategy under Islamic principles. According to Islamic finance principles, interest-bearing debt should be paid off as soon as possible to fulfill ethical obligations and promote financial well-being. By implementing an accelerated payment strategy, you not only reduce your debt but also adhere to the principles of Islamic finance. Our tool offers a simple yet valuable solution for determining the best approach to accelerating debt payments. It does not require a substantial investment but offers long-term benefits. Utilizing this tool can align your financial practices with Islamic principles while reducing your overall debt burden. Taking proactive steps to pay off your debt promptly is essential, allowing you to avoid unnecessary stress and financial burdens. By accelerating weekly or bi-weekly payments, you can significantly reduce the interest accrued on your debt and expedite the repayment process. This approach ensures that you maintain financial control and achieve your goal of becoming debt-free in a manner consistent with Islamic principles. By adopting an accelerated payment strategy, you can save on interest costs and align your financial practices with Islamic rulings. Our tool provides valuable insights and requires minimal investment, making it accessible to most individuals. Prioritizing the prompt repayment of debt benefits you as an individual and promotes financial stability and adherence to Islamic finance principles.
Since there are benefits in both Accelerating Weekly and Bi-Weekly payments, questions arise about which one is to choose. You do not want to pay more than required, so Accelerating Bi-Weekly payments is the best way to go.
The table below compares the different mortgage amounts by calculating the interest savings on each. The interest savings are proportional to the mortgage amount, i.e., the larger the mortgage amount, the bigger the interest savings. We aim not to encourage people to buy an expensive home but to make a point on the mortgage interest's behavior in the mortgage amount's function.
The interest rate is proportional to the mortgage amortization years on the Accelerated Weekly or Bi-Weekly payments. At the lower interest rate, the number of years reduced is lower than those at the higher interest rate. It dictates that buying the mortgage at a higher interest rate will help you become mortgage free sooner. You should not be tempted to go for a higher interest rate; rather, keep the interest rate as low as possible to reduce the mortgage interest.
DISCLAIMER: We strive to offer users accurate information to the best of our knowledge. However, laws are subject to change; therefore, the user assumes full responsibility and should utilize the information on our website and this tool as a reference per our terms and conditions. If you believe any part of the calculation is incorrect or contains errors, we kindly request your feedback here.