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From: cc-06@ucbcory.BERKELEY.EDU (Ilya Goldberg)
Newsgroups: net.consumers
Subject: Re: Semi-monthly mortgage repayments
Message-ID: <10961@ucbvax.BERKELEY.EDU>
Date: Tue, 12-Nov-85 20:52:16 EST
Article-I.D.: ucbvax.10961
Posted: Tue Nov 12 20:52:16 1985
Date-Received: Thu, 14-Nov-85 01:10:20 EST
References: <1389@decwrl.UUCP>
Sender: usenet@ucbvax.BERKELEY.EDU
Reply-To: cc-06@ucbcory.UUCP (Ilya Goldberg)
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Organization: University of California, Berkeley
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In article <1389@decwrl.UUCP> marks@yogi.DEC writes:
>
>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
>[...]  and you pay off what would
>have been a 30 year mortgage in something like 12 years.
>

12 years seems a much smaller time period than 30 and is not very believable.
Could someone post a formula either verifying '12 years' or giving the
correct period of time based on the above pay off arrangement?

						Ilya	(...!ucbvax!ilya)