Bi-weekly mortgage payment programs

The typical mortgage asks for one payment per month, which equals 12 payments per year. Each mortgage payment has an interest portion and a principal portion. The interest part goes to your lender to cover the monthly interest on your remaining balance. The principal part goes toward actually reducing that balance. As you pay down your balance, the interest cost diminishes.

That leaves more of your payment for reducing your balance. But later, it drops dramatically. The technical term for this repayment schedule is amortization ah-mor-ti-ZHAY-shun.

Instead of taking 12 payments per year, the bi-weekly payment plan asks for one payment every two weeks, which adds up to 13 payments per year. Anything over that amount must be directed toward reducing your remaining principal balance.

When you have a mortgage, at some point you may decide to try and pay it off early. One option to consider is a biweekly every two week payment plan. With biweekly mortgage payments , you make 26 half-payments a year, which equates to 13 total payments in a year. It can be a good option for those wanting to contribute more money toward a mortgage, without having to commit a large amount of money.

However, there are some drawbacks to this method. Lets consider the pros and cons of entering a biweekly mortgage plan. With a year mortgage, it will normally take you 30 years to pay this off. But if you make biweekly mortgage payments, you will be making what equates to 13 monthly payments each year.

Assuming a 6. One of the reasons why homeownership is so attractive to so many people is that it allows you to build equity. Might be best to give them a call and ask. Thanks for this info.

If you were to calculate the bi-weekly payment with just the principal and interest portion, you would be short on your monthly payment amount. This helped me out tremendously! Which are the banks that actually offer this facility? I set up a bi-weekly mortgage program with my home loan and an extra thirty dollar a month principal only payment as well, but I see no reflection in the loan when I look on the amortization schedule printout. Could it be a mistake on the banks part? Probably best to ask them directly.

So if i make a payment every 2 weeks, would equal one extra payment a year. So why is the mortgage company suspending it each month. Is there law on this? You have to make sure the mortgage company loan servicer will accept partial payments, otherwise they may reject them. Or ask if they can setup your account to accept biweekly mortgage payments so they are processed properly. Thanks this information is really helpful.

It is a little tedious because you have to follow the amortization statement precisely. However, this plan works best in the early stages of the mortgage because the principal starts to increase the older the mortgage. Would that equate to the same savings in interest and reduced payments? If paid on the 16th or later will go toward following month. So if payment is due on the 1st of every month, and you pay two weeks early on the 16th, nothing would change no savings versus paying on the 31st or even up until the 15th of the following month.

Thank you so much for this article, the information you provide is great. Some years back we had what was considered to be a TRUE Bi-Weekly mortgage payment option, which not only allowed us to pay 26 half payments, but also had no initial set-up fee or extra service charges. Instead they would post the half payment within a day or so of receiving it. So my question is, yes there is one, where can I find a bank that actually does True Bi Weekly?

It seemed to be more popular back in the day. How long will it take for me pay off a 30 year mortgage if I pick up the twice a month mortgage after paying for 20 years? Your email address will not be published. Twitter Facebook LinkedIn Email. Tiffany April 2, at pm. Thank you! Colin Robertson April 2, at pm.

Tiffany, Making extra or larger payments reduces the outstanding loan balance quicker, and as that balance decreases less interest is charged over time.

Tiffany April 3, at pm. Colin Robertson April 4, at am. Wade Kinlaw May 3, at pm. Colin, Hello! Colin Robertson May 4, at am. Samuel May 11, at pm. Hey Colin , Just tagging onto the response you answered for Wade, What would you suggest in my case. Colin Robertson May 12, at am. Bill May 14, at pm. Colin Robertson May 18, at pm. Bill, A true biweekly is your regular monthly payment split in two every two weeks, aka 26 half payments, 13 full payments.

Bill May 21, at am. Jose June 4, at pm. Colin Robertson June 9, at am.