You Should Be Making Biweekly Mortgage Payments, Here’s Why

By Kayla Albert on in Category Mortgage
Making Biweekly Mortgage Payments

The day when you can send in the final payment on your mortgage might seem like light years away, but it doesn’t have to be. In fact, there is one small adjustment you can make to how you pay your mortgage that will not only shorten the amount of time it takes to pay it off, but also cuts down the total amount owed by a significant portion.

It all boils down to this: Instead of sending in one monthly mortgage payment, you split the monthly amount in half and pay on a biweekly schedule instead.

Here’s why it makes such a difference:

You end up making one additional payment per year.

The biggest reason why paying your mortgage on a biweekly schedule makes such a difference is because, while monthly payments will give you 12 payments per year, biweekly payments will actually give you 26 half payments – or 13 full payments — per year. That one extra payment can have a surprisingly large impact over 30-year mortgage.

Check out this example:

An $180,000, 30-year mortgage with an interest rate of 3.75% would have a monthly payment of $833.61. Over the life of the loan, the total interest paid would equal $120,098.90.

Now consider this: that same mortgage would have a biweekly payment amount of $416.80. Over the life of the loan, the total interest paid would be $101,343.83.

That’s a savings of $18,755.07 – certainly nothing to scoff at. In addition, the loan would be paid off a whopping four years earlier with the biweekly plan.

(You can calculate your savings here.)

Now that you see the obvious cost and time-saving benefits to paying your mortgage biweekly, it’s important to understand the best way to go about it.

Steer clear of your lender’s biweekly mortgage plan.

Many homeowners are tempted to simply use their lender’s biweekly mortgage payment plan because of the added convenience, but these plans don’t work like you might assume.

For instance, while you are sending in a payment every two weeks, the company servicing the loan will hold the first payment until the second one arrives, only then applying the payment to your mortgage. So while splitting the payment in two might be helpful for budgeting purposes, it won’t actually be treated like a biweekly payment when it comes to reducing the interest paid on your mortgage.

In addition, these plans come at a price. Even though you aren’t reaping all the benefits, you are paying a fee to have the payments handled and delivered on your behalf.

But the good news is, you don’t have to sign up for a biweekly mortgage payment plan through your lender.

Set up a biweekly mortgage payments plan on your own.

You can always send in additional payments on your mortgage, but the key here is communicating with your lender that you want these extra payments to be applied directly to your principal. If you don’t make this clear, your lender will apply these payments to your interest, essentially negating your efforts to shorten the amount of time it takes to pay off your loan.

You can recreate the benefits of biweekly payments in a variety of ways.

Since the biggest benefit of making biweekly payments is having one extra payment per year to apply to your mortgage, you could essential recreate this in a variety of ways.

  • Apply your tax return or a portion of your raise to your mortgage
  • Divide one payment by 12 and tack on that extra amount to your monthly payment
  • Round up each mortgage payment to the nearest $100

But while all of these are great ways to shave time and money off your mortgage, perhaps the biggest benefit of paying biweekly is not feeling the mental pain or financial pinch of making this extra payment. What could be better than that?

About the Author

Bio: Kayla Albert is a writer and content strategist committed to helping others build a solid financial foundation in order to live their best life possible. You can read more of her writing at

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