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Reviewed by Dominik Czernia, PhD and Jack Bowater Last updated: Oct 13, 2022 Is it better to make bi-weekly mortgage payments? You can quickly find the answer by comparing a bi-weekly mortgage to an alternative schedule using our bi-weekly mortgage payment calculator. In addition, you can check how an extra principal payment would affect your schedule and interest cost so you can apply our tool as a bi-weekly mortgage calculator with extra payments as well. To sum up, you can make any of the following comparisons:
Read further, and we will give you some advice on how to make bi-weekly mortgage payments and explain the difference between bi-weekly and accelerated bi-weekly mortgage payments. Of course, we will also explain how to apply this bi-weekly mortgage payment calculator with additional payments. If you would like to check other ways to speed up your repayment, check our mortgage acceleration calculator, where you can choose multiple types of repayment frequencies. How to make bi-weekly mortgage payments: an example of a 30 year mortgage bi-weekly paymentThe natural question that comes to mind is "How to make bi-weekly mortgage payments to pay off the mortgage faster and pay less interest?". In general, mortgages have a monthly repayment schedule forming twelve equal payments in a year over the whole repayment term. However, you can considerably accelerate your repayment and reduce your interest cost by paying half of the monthly payment every second week, equaling 26 payments in a year. For example, consider a 30-year mortgage bi-weekly payment with a 6 percent annual interest rate for a $300,000 loan. With this, you should pay near $900 every second week, which is half of the payment you would pay with a monthly repayment schedule. Since there are not exactly two bi-week period within a month, the remained days sum up to an extra monthly payment over a year. You can read the result in the following table, which you can also check in our bi-weekly mortgage calculator for comparison.
But how do these relatively minor changes make such big a difference? The crucial point that can make a considerable difference is amortization, a peculiar feature of most loans and mortgages. When your repayment follows an amortization schedule, your periodic payment remains constant, but its interest-principal proportion alters throughout the loan term. More precisely, a larger part of your periodic payments covers the interest due to the high principal amount at the beginning of the repayment period. As you proceed with the repayment, your principal balance drops gradually, which lowers the interest payment, making a faster reduction in the loan balance possible. You can learn about it more in our amortization calculator. By boosting the payment frequency and paying a bit more through a bi-weekly mortgage, you accelerate the principal balance reduction, leading to a faster payoff and lower interest charges. Use our bi-weekly mortgage payment calculator with extra payments to check it in practice. To conclude, it is worth choosing a bi-weekly mortgage if you can afford it. However, you must always check additional fees, extra costs, and possible differences in interest rates or APR to make the right decision.
Should I make bi-weekly mortgage payments? - Applying the bi-weekly mortgage payment calculatorTo run the accelerated bi-weekly mortgage calculator with extra payments and find out, e.g., what a 20-year mortgage bi-weekly payments could be, you need to specify the following parameters of your mortgage loans: 1. Bi-weekly mortgage inputs
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2. Payment summary
After setting all parameters, you will immediately see the results in the summary table, in which you can check how your interest and repayment term would change by making bi-weekly mortgage payments. With all this information provided by the extra payment bi-weekly mortgage calculator, it will be easy to see if is it better to make bi-weekly mortgage payments. What is difference between bi-weekly and accelerated bi-weekly mortgage payments?While standard bi-weekly mortgage means half of the monthly payment 24 times, accelerated bi-weekly mortgage requires the same payment but 26 times in a year. The standard bi-weekly mortgage results in the same amount of money paid in a given year, with accelerated bi-weekly mortgage you pay an extra monthly payment per year, leading to a faster mortgage amortization and lower interest cost. Note that in the US, the two mortgage schemes identically refer to the accelerated amortization schedule, as opposed to Canada, where they associate with different schedules. FAQHow much can I save by choosing a 20-year mortgage bi-weekly payments?Let's say you want to take a $200,000 mortgage with 3 percent interest. By paying $554,60 bi-weekly instead of $1.109,20 monthly, you can save $7.509,82 and fully pay off your mortgage in 18 years instead of 20 years. How can I save with bi-weekly mortgage payments?If you take a mortgage, then:
How does an accelerated bi-weekly mortgage work?The accelerated bi-weekly mortgage requires half of a monthly payment but 26 times in a year, resulting in an extra monthly payment per year that leads to a faster mortgage amortization and lower interest cost. Bi-weekly mortgage payment calculator disclaimerYou should consider the bi-weekly mortgage calculator with additional principal payments as a model for financial approximation. All payment figures, balances, and interest figures are estimates based on the data you provided in the specifications that are, despite our best effort, not exhaustive. For this reason, we created the calculator for instructional purposes only. Still, if you experience a relevant drawback or encounter any inaccuracy, we are always pleased to receive useful feedback and advice. Bi-weekly mortgage inputs Payment summary
10/1 ARM28/36 RuleAmortization… 58 more How much faster will I pay off my mortgage with biweekly payments?Tens of thousands of dollars can be saved by making bi-weekly mortgage payments and enables the homeowner to pay off the mortgage almost eight years early with a savings of 23% of 30% of total interest costs. With the bi-weekly mortgage plan each year, one additional mortgage payment is made.
How many years does biweekly payments knock off of a 30On a biweekly schedule, you'll have two calendar months in which you end up making three payments. For the rest of the time, you'll make only two payments per month. As you can see, you would trim about five years from a 30-year loan term and also save $53,000 in interest by switching to biweekly payments.
Is it better to pay mortgage biweekly or make extra payments?When you make biweekly payments, you could save more money on interest and pay your mortgage down faster than you would by making payments once a month. When you decide to make biweekly payments instead of monthly payments, you're using the yearly calendar to your benefit.
How long will it take to pay off my loan with biweekly payments?If you pay according to your lender's standard amortization schedule, your loan will take you 30 years to repay. However, by paying biweekly – and essentially making one extra monthly payment a year – you'll actually pay your loan off midway through year 25.
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Early mortgage payoff calculator with biweekly payments
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