Home Equity

How Do Biweekly Mortgage Payments Work

By David Krug David Krug is the CEO & President of Bankovia. He's a lifelong expat who has lived in the Philippines, Mexico, Thailand, and Colombia. When he's not reading about cryptocurrencies, he's researching the latest personal finance software. 4 minute read

Now that my husband and I have been homeowners for almost three years, we receive periodic mailings encouraging us to consider making biweekly mortgage payments.

The letter will then go on to explain how much interest you will save and how many years you will cut off your mortgage payments. The staggering magnitude of these savings makes these schemes alluring.

We’ve laid out the benefits and drawbacks of biweekly mortgage payments so you can make an informed decision.

What Are Biweekly Mortgage Plans?

Mortgage Payment Schedules Based on Biweekly Pay Periods Mortgage payments might be made biweekly if you were to divide the monthly amount in two. With 13 monthly mortgage payments spread out over the course of the year, the total number of payments you’ll make is 26.

The interest rate will drop as a result of this additional principal payment. The lender or its designated marketing firm will normally initiate the planning.

Let’s examine a hypothetical situation. Assume you’re taking out a 30-year mortgage for $186,281 at 5% interest (360 months). A $1,000 annual payment would cost you $12,000 total.

You would spend $173,717.81 on interest alone throughout the course of the loan’s duration. Biweekly payments of $500 would amount to $13,000 annually. This would cut the mortgage term by around 5 years and lower interest payments to around $143,000. This amounts to a savings of over $31,000!

The Benefits and Drawbacks of Biweekly Mortgage Payments


  • Over the course of the loan, your interest payments will be lower.
  • The time it takes you to repay your mortgage will be cut down significantly.
  • The portion of your wage that goes toward housing costs, if you pay rent every two weeks, will remain consistent. As a result, keeping track of one’s finances and sticking to a budget will be less of a hassle.
  • The program basically mandates that you pay more each month on your mortgage.


  • To enroll in the program, you may have to pay a fee to either your lender or the designated marketing firm. The cost averages $300, not counting potential biweekly payment service charges.
  • You may not be able to afford to make annual additional mortgage payments if you’ve just purchased a property that cost more than you could comfortably afford.

4 Alternative Mortgage Saving Strategies

A monthly mortgage plan has some attractive benefits, but there are alternative ways to save money on your mortgage without incurring the mortgage costs or making the commitment required by the plan.

  1. Don’t be afraid to increase your principal payment.
    You can avoid the costs associated with the biweekly mortgage plan by paying an extra one-twelfth of your monthly payment on a regular basis. The payment coupon you use should allow you to make a larger payment toward the principal if you so want. Lenders may roll over the additional amount into the following month’s payment if you do not exercise this choice. It will save you a little fortune in fees and a large sum in interest. Make sure that a mortgage prepayment penalty isn’t part of your loan’s conditions.
  2. Refinance
    Refinancing your home mortgage loan might be an excellent choice for you, depending on how much you still owe on your mortgage and the interest rate you can receive. Discuss your options with a mortgage broker to see if refinancing is the right move for you and if the savings would justify the costs. Think about refinancing into a mortgage with a shorter term.
  3. Downsize
    Moving to a smaller house and simplifying your life is a great way to save money. Your mortgage payment will be reduced, and you’ll also have less to pay for heating and cooling. You may also use online marketplaces like Amazon and eBay to sell your belongings.
  4. Collect Rent from Your Vacant Rooms
    If you’re sitting on unused space, you might want to think about renting it out. Make sure you conduct a thorough background check on any possible housemates, and protect yourself with a written lease agreement. There are a lot of obligations that come with being a landlord, so be prepared.

Bottom Line

My spouse and I weighed the benefits and drawbacks of the biweekly mortgage payment plan and ultimately decided against it. Even while it would be fantastic to save money on interest and knock 27 years off our mortgage, I refuse to incur the costs associated with doing so.

There will be greater leeway for us as a result of this as well. It is our intention to pay as much of the principal as possible each month, and if we have the means to do so, we will apply the extra funds directly to that purpose.

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