Bi-weekly vs Monthly Mortgage Savings
Discover how a simple change in payment frequency can shave years off your mortgage and save you thousands in interest.
Total amount borrowed
Your mortgage APR
The original length of the loan
What is a bi-weekly mortgage payment plan?
A bi-weekly mortgage plan involves paying half of your monthly mortgage payment every two weeks. Because there are 52 weeks in a year, you make 26 half-payments, which equals 13 full monthly payments per year. This extra payment goes directly toward your principal, reducing the loan balance faster and saving you thousands in interest.
Is bi-weekly payment the same as making an extra payment per year?
Yes, mathematically it is identical. Making 26 half-payments is the same as making 12 full payments plus one extra full payment per year. The advantage of the bi-weekly system is that it automates the process, making it easier to manage your budget without feeling the impact of a single large extra payment.
Can I switch to bi-weekly payments with any lender?
Not all lenders offer official bi-weekly payment plans. Some may charge a fee to set it up. If your lender doesn't support it, you can simulate bi-weekly payments by dividing your monthly payment by 12 and adding that amount to each monthly payment, or simply making one extra full payment per year.
How much time can I actually save?
Depending on your interest rate and loan term, bi-weekly payments can shave 4 to 6 years off a 30-year mortgage. The higher your interest rate, the more significant the savings. For a $300,000 loan at 6.5%, bi-weekly payments can save over $60,000 in interest and shorten the loan by about 5 years.