Biweekly vs Monthly Mortgage Payments: Which Saves More?

The Hidden Power of Payment Frequency

Most homeowners default to making one mortgage payment a month. It’s simple, it aligns with most bills, and it’s what the bank expects. But did you know that simply changing when you pay can shave years off your loan term?

Switching from a monthly to a biweekly payment schedule is one of the easiest "hacks" in personal finance. It doesn't require a massive increase in income or a complex refinance. It just leverages the calendar to your advantage.

How Biweekly Payments Work

The concept is straightforward: instead of paying your full mortgage amount once a month, you pay half of that amount every two weeks.

Here is the math:

• Monthly Schedule: 12 payments per year.
• Biweekly Schedule: 26 half-payments per year (since there are 52 weeks in a year).

26 half-payments equals 13 full payments.

By making that one extra full payment each year, applied directly to your principal balance, you reduce the amount of interest that accrues over the life of the loan.

The Savings: A Real-World Example

Let's look at a standard scenario:

• Loan Amount: $350,000
• Interest Rate: 6.5%
• Term: 30 Years

Monthly Payment: ~$2,212 (Principal & Interest)

| Scenario | Total Interest Paid | Payoff Time | | :--- | :--- | :--- | | Standard Monthly | ~$446,000 | 30 Years | | Biweekly | ~$345,000 | ~24 Years, 6 Months |

Total Savings: Over $100,000 in interest and 5.5 years of payments eliminated.

(Note: These numbers are estimates. Use our Biweekly Mortgage Calculator to run your specific numbers.)

Pros and Cons of Biweekly Payments

Pros

1. Massive Interest Savings: As shown above, the savings can be substantial.
2. Faster Equity Building: You own more of your home sooner.
3. Automatic Discipline: Once set up, you don't have to think about making "extra" payments manually.

Cons

1. Setup Fees: Some lenders charge a fee to set up biweekly drafts. (Avoid these lenders or set it up manually!)
2. Cash Flow: You need to ensure you have the funds available every two weeks, which might not align with a monthly paycheck.
3. Prepayment Penalties: Verify your loan doesn't have penalties for paying early (most modern loans don't).

How to Set Up Biweekly Payments

You have two main options:

1. Official Lender Program: Call your mortgage servicer. Ask if they offer a biweekly auto-draft program. Ensure that payments are applied immediately and that there are no fees.
2. The DIY Method: If your lender charges fees, just do it yourself. Take your monthly payment, divide by 12, and add that amount to your regular monthly check as "Principal Only."
   • Example: Payment is $1,200. $1,200 / 12 = $100. Pay $1,300 every month. This achieves the exact same result as a biweekly schedule without the hassle.

FAQ

Does biweekly mean twice a month?

No. Twice a month (semi-monthly) would result in 24 payments (12 full payments). Biweekly means every two weeks (26 half-payments), which results in 13 full payments.

Can I just pay extra whenever I want?

Absolutely. Using our Extra Payment Mortgage Calculator, you can see that adding any amount to the principal helps. Biweekly is just a structured way to do it.

Will my lender charge me for this?

Some third-party services charge hundreds of dollars to set this up. Never pay for this service. You can achieve the same result for free by paying extra principal yourself.

Summary

If your budget allows for essentially one extra payment per year, the biweekly strategy is a no-brainer. It is a low-risk, high-reward way to guarantee a return on your money equal to your mortgage interest rate.

Ready to see how much you could save? Try the Biweekly Mortgage Calculator now.