Biweekly Payment Mortgages: Accelerating Loan Repayment

A biweekly payment mortgage is a strategy that allows borrowers to make payments every two weeks instead of once a month. By making half of a monthly mortgage payment every two weeks, homeowners make the equivalent of 13 full monthly payments each year, instead of the standard 12. This extra payment can help accelerate the repayment of the mortgage and save money on interest over time.

One of the biggest advantages of a biweekly payment mortgage is that it reduces the total interest paid on the loan. By making an extra payment each year, homeowners reduce their loan balance faster, which means they pay less interest overall. Over the life of a 30-year mortgage, this can result in significant savings and shorten the loan term by several years.

Biweekly payments are also a great option for homeowners who want to pay off their mortgage early without committing to larger monthly payments. Because the extra payment is spread out over the year, it’s often easier for homeowners to manage than a lump-sum payment at the end of the year. This can be a good fit for those with steady, biweekly paychecks.

It’s important to note, however, that not all lenders offer biweekly payment options. If your lender doesn’t offer this plan, you can still achieve the same results by making extra payments manually. For example, you can make one extra monthly payment each year or divide your monthly payment by 12 and add that amount to your payment each month.

Another thing to consider is whether there are any fees associated with setting up a biweekly payment plan. Some lenders charge a fee for converting a loan to biweekly payments, so it’s important to factor that into your decision. Additionally, if your budget is tight, it’s essential to ensure that making payments every two weeks fits within your financial plan.

A biweekly payment mortgage can be a smart way to pay off your home loan faster and save on interest costs. If your goal is to become mortgage-free sooner, this option may be worth exploring with your lender.