Short answer
Paying half your mortgage payment every two weeks makes 13 full payments a year. On a $320,000 loan at 6.5%, that pays it off in about 24.2 years instead of 30 and cuts interest from $408,142 to about $314,146, a saving of about $93,996.
1. The numbers
| Schedule ($320,000 at 6.5%) | Payoff time | Total interest |
|---|---|---|
| Monthly, $2,022.62 (12 a year) | 30 years | $408,142 |
| Biweekly, $1,011.31 (26 a year) | about 24.2 years | about $314,146 |
Savings: about 5.8 years and about $93,996 in interest.
2. Why it works
There are 52 weeks, so 26 biweekly half-payments equal 13 monthly payments. The extra payment each year goes to principal, which lowers the balance on which interest is charged.
3. DIY version
You can get the same effect without a special program by paying one-twelfth of your payment extra each month ($168.55 here) and designating it as principal. In the Mortgage Calculator, enter that amount in Extra Principal Payment.
4. Before you sign up
- Ask if your servicer applies each half-payment on receipt. If it holds the money until the full amount is collected, the benefit shrinks.
- Avoid third-party programs that charge fees.
- Check for prepayment penalties (uncommon on many mortgages).
For how extra payments compare with investing the money, read extra payments vs investing.
5. Frequently asked questions
Do biweekly mortgage payments save money?expand_more
Yes. 26 half-payments equal 13 full payments a year. On a $320,000 loan at 6.5%, they pay it off in about 24.2 years and save about $93,996 in interest.
How do I make biweekly payments without a fee?expand_more
Pay one-twelfth of your monthly payment extra each month toward principal, or ask your servicer if it offers free biweekly payments.
Is paying biweekly the same as making extra payments?expand_more
Mostly, because the benefit is the one extra payment per year. The effect is similar to adding one-twelfth to each monthly payment.
Will biweekly payments help me remove PMI sooner?expand_more
Yes. Extra principal brings the balance to 80% of the original value sooner.