Biweekly mortgage payment calculator with extra payments

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If you have the available cash flow, you can make extra payments which are used to reduce the loan balance. When you decrease the amount owed, you lower the amount of interest due. Doing this is called prepaying principal.

Even making one extra payment will save you interest. This calculator supports both lump sum or one-time extra payments as well as a series of additional payments.

To see how much you'll save, you may apply the extra payment to either the monthly loan or the biweekly loan, or both. The idea here is, you may want to compare a debt paid biweekly without additional payments to a debt paid monthly, where you do plan to make extra payments.

Or you may want to see how much the biweekly loan will save over the conventional loan when you add extra payments to get an additional saving boost.

Note: In keeping with the theme of this calculator, the extra payment for the biweekly loan will be 1/2 the amount you enter. This is an intentional design feature, not a bug!

A biweekly loan will save you money.

A biweekly loan and making extra payments will save you even more money.

But is doing either the right, long term, financial strategy?

Forgone Opportunity Costs - They Could Cost You!

At the top of this post, when explaining how a biweekly payment loan works and how it saves interest charges, I showed you some simple arithmetic. In the example, if you, the borrower, elects to pay every other week, you'll pay $2,000 more per year than if you make 12 monthly payments.

You should ask yourself, what else could you be doing with the $2,000?

Could you be investing it?

If you make biweekly payments, you lose the opportunity to invest them. Not being able to save and invest is a forgone opportunity. It does not come back.

The question then is, if you invested the $2,000, how much would it earn over the term of the biweekly loan? Would you gain more than you expect to save interest charges?

Several calculators on this site will answer these questions for you. This Savings Calculator is a good place to start.

What you want to know is what will be the future value of $2,000 invested every year for the next 22 years or so (typically the term of the biweekly loan at today's interest rates). If the future value is more than that amount you save in interest, then perhaps you should not take out a biweekly mortgage?

Remember though, there are usually risks to investing, while the interest saved with a biweekly mortgage or loan is a mathematical certainty.

Charts

If you are like me, you'll get tired of staring at columns of numbers. That's where charts come into play. Take a look at the recently updated charts to get a quick summary of all the details you'll find in the amortization schedules.

This calculator includes six of them.

If you are a blogger, feel free to export () any of the charts you create and to post them on your site to help prove your point!

What do you think?

Bi-Weekly Payment Calculator For an Existing Mortgage

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Bi-weekly payments can be an effective way to pay off your mortgage faster. By making what amounts to an extra monthly payment a year, you can pay down your loan principle more quickly and shave several years off your loan, saving thousands of dollars in mortgage interest in the process. This bi-weekly payment calculator is designed to help you determine how much you can save on your existing mortgage by switching to a bi-weekly payment schedule. Even if you've already had the loan for several years, this calculator can pick things up from here and let you know how much interest you can save and how much faster you'll pay off the loan by switching to a bi-weekly payment schedule.

By changing any value in the following form fields, calculated values are immediately provided for displayed output values. Click the view report button to see all of your results.

First payment date : * This entry is Required.

Original mortgage amount : * This entry is Required. Enter an amount between $1,000 and $10,000,000

Interest rate : * This entry is Required. Enter an amount between 0% and 24%

Original mortgage term : * This entry is Required.

Monthly escrow payment : * This entry is Required. Enter an amount between $0.00 and $15,000.00

Monthly prepayment amount : * This entry is Required. Enter an amount between $0.00 and $15,000.00

$506.69 accelerated bi-weekly

About Bi-weekly Payments for an Existing Mortgage

The savings you can get from bi-weekly mortgage payments are due to the fact there are 52 weeks a year. That means you'd make 26 bi-weekly payments. If instead of making monthly payments you pay half that amount every two weeks, that works out to the equivalent of 13 monthly payments – one extra payment per year.

Of course, that money has to come from somewhere. For that reason, bi-weekly payments often work best for someone who is paid on a weekly or bi-weekly basis, rather than once or twice a month. You can take the same amount out of every paycheck for your mortgage without having make a lot of changes to your budget or save up for those months when you'd be making an extra payment.

That extra payment doesn't simply shorten your mortgage by one month a year. Because of the way compounding interest works, those extra payments shorten your loan even more, and reduce your interest costs over the life of the loan as well. You also build equity faster, which can speed the day you can cancel private mortgage insurance (PMI) if you put less than 20 percent down on your mortgage.

Bi-weekly payments are most effective with home loans that have a relatively high mortgage rate. That's because there's more interest to take a bite out of by paying down the loan more quickly. But even with the low rates that have been common in recent years, a bi-monthly payment schedule can still shave several years off you mortgage and save you thousands of dollars in interest costs.

Using the Bi-weekly Calculator for an Existing Mortgage

The calculator will figure your bi-weekly mortgage payments for fixed-rate mortgages of up to 40 years. Your bi-weekly payment will simply be half of what a monthly payment would be for the same loan.

For purposes of amortization, the calculator assumes you will make one extra bi-weekly payment every six months, regardless of when those payments might actually occur on the calendar. (On a bi-weekly schedule, there will be two months a year when you make three mortgage payments, though those may not be six months apart. But for purposes of amortization, that makes little difference).

As this is an existing loan calculator, the calculator will take the date you began making payments and figure your savings from the current date forward.

Enter the following information:

• First payment date: This is the date you made your first payment on your current mortgage.
• Original mortgage amount: How much you borrowed. The calculator will determine your current balance based on regular amortization; that is, the normal rate you would pay down the loan without additional or missed payments.
• Interest rate: Your mortgage rate
• Monthly escrow payment: This is optional. However, if your escrow payments are included as part of your loan, including them as part of your "extra" biweekly payments each year will help pay down your loan faster.
• Monthly prepayment amount: This is also optional. This would be any additional amount you'd like to pay on top of your regular biweekly payments.

Once you've entered your information, the calculator will determine your monthly and bimonthly payments. Your interest savings will be shown at the top of the page and the time it will take to pay off the loan will be just below the calculator.

For a more detailed breakdown and amortization schedule, click "Show report" at the top of the page.

Another possibility to save money would be to refinance your mortgage. Click "Get Free Quote" to get personalized refinance or home equity rate quotes from lenders.

Other Mortgage and Financial Calculators

In addition to the standard mortgage calculator, this page lets you access more than 100 other financial calculators covering a broad variety of situations. Choose from calculators covering various aspects of mortgages, auto loans, investments, student loans, taxes, retirement planning and more.

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