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What Are Biweekly Mortgage Payments?
Instead of making one monthly mortgage payment, you make a payment equal to half your monthly amount every two weeks. Since there are 52 weeks in a year, you make 26 half-payments, which equals 13 full monthly payments instead of 12. That extra payment each year goes entirely toward principal, accelerating your payoff.
The Math Behind the Savings
On a $300,000 mortgage at 6.5% over 30 years, your monthly payment is approximately $1,896. With biweekly payments of $948, you make one extra full payment per year. This simple change can save approximately $58,000 in interest and pay off your mortgage about 4-5 years early. The savings come from reducing your principal faster, which means less interest accrues each month.
Biweekly vs Monthly: A Clear Winner
The beauty of biweekly payments is that they align with most peoples pay schedules, making budgeting easier. Many employers pay employees every two weeks, so your mortgage payment coincides with your paycheck. The Federal Trade Commission notes that biweekly payment plans can be effective, but cautions against third-party services that charge setup fees — you can often set this up directly with your lender for free [1].
Watch Out for Third-Party Services
Some companies offer biweekly payment programs for a fee, typically $300-500 setup plus monthly charges. In most cases, you can achieve the same result for free by simply making one extra payment per year or dividing your monthly payment by 12 and adding that amount to each monthly payment. Always check with your lender first [2].