Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Posting-Version: version B 2.10.2 9/18/84; site decwrl.UUCP Path: utzoo!watmath!clyde!cbosgd!ihnp4!mhuxn!mhuxr!ulysses!allegra!mit-eddie!genrad!panda!talcott!harvard!seismo!lll-crg!ucdavis!ucbvax!decwrl!dec-rhea!dec-yogi!marks From: marks@yogi.DEC Newsgroups: net.consumers Subject: Semi-monthly mortgage repayments Message-ID: <1389@decwrl.UUCP> Date: Tue, 12-Nov-85 09:02:42 EST Article-I.D.: decwrl.1389 Posted: Tue Nov 12 09:02:42 1985 Date-Received: Thu, 14-Nov-85 20:34:12 EST Sender: daemon@decwrl.UUCP Organization: Digital Equipment Corporation Lines: 27 I have recently read about a new type of real estate mortgage agreement, in which the bank gives the buyer a mortgage at the normal insterest rate for, say, a 30-year, fixed-rate mortgage, but allows the mortgagor to pay off the loan semi-monthly rather than once a month. The total monthly payments are the same, they are just split in half and paid twice a month. The incredible part of this is that you manage to reduce your interest so much by paying the loan semi-monthly, that you end up paying only a fraction of the total interest you would otherwise have paid, while expending the same amount of money per month, and you pay off what would have been a 30 year mortgage in something like 12 years. Clearly, this system benefits the consumer greatly, but banks are not exactly rushing to sign people up under this system. The only advantage I can see from the bank's point of view is that the bank has the loan repaid in a much shorter period of time than it otherwise would. Of course, it is losing lots of interest money on the deal. My question is this: does anyone know of any banks that are doing this? I live in the Boston area, but the closest bank I have found that does this type of mortgage is the Hudson City National Bank in Chatham, N.Y. (upstate). Seems like a great deal to me. Wonder how the banks could be convinced. R.M.