Use our Bi-Weekly Mortgage Acceleration Calculator to understand the financial benefits of accelerating a bi-weekly loan, or paying more than the required mortgage payment. With a bi-weekly mortgage you make payments every two weeks instead of monthly. Making payments every two weeks already reduces the length of your mortgage and lowers your total interest expense compared to a monthly mortgage but accelerating a bi-weekly loan enables you to payoff your loan balance even faster which saves you more money. Our calculator determines how many payments and how much total interest expense you save by overpaying a bi-weekly mortgage.Watch our Bi-Weekly Mortgage Acceleration Calculator "How To" video
To use our calculator, input your bi-weekly mortgage amount, interest rate, loan length, mortgage start date, overpayment start date and amount of overpayment. For example, if your required payment is $1,300 and the payment you make is $1,500, your overpayment amount is $200. The calculator enables you to start accelerating your loan at any time and by any amount over the course of your mortgage.
Our Bi-Weekly Mortgage Acceleration Calculator shows you your estimated payment, the number of required payments and total interest expense over the course of your loan with and without acceleration. This enables you to understand how you reduce the length of your mortgage and how much money you save by overpaying a bi-weekly loan.
The graph at the bottom of the page shows how overpaying a bi-weekly mortgage enables you to payoff your loan balance faster which significantly shortens your loan term and lowers your interest cost.
A bi-weekly mortgage is usually paid off four-to-five years earlier than a 30 year mortgage, depending on your interest rate and loan amount. If you accelerate a bi-weekly mortgage you pay it off even faster, which can save you thousands of dollars in total interest expense over the life of the loan. Accelerating a bi-weekly mortgage means paying more than the required bi-weekly payment. For example, if your bi-weekly mortgage payment is $1,000 you pay an additional $200 for a total payment of $1,200. Accelerating a bi-weekly mortgage "turbo charges" the pay-off of a loan that is already paid down faster than a regular monthly mortgage.
Borrowers have flexibility to apply mortgage acceleration in the way that best meets their financial priorities. Borrowers can start and stop acceleration at any point and change the amount by which they overpay their bi-weekly mortgage. For example, borrowers can accelerate their loan by $50 one payment, $150 the next payment and then stop accelerating their mortgage at any time. With mortgage acceleration, the more you overpay, the more money you save because pay off your mortgage faster with each extra dollar which lowers your interest expense. To implement mortgage acceleration add the amount by which you want to overpay your mortgage to your bi-weekly payment and indicate to your lender that the extra money is applied to pay down your principal mortgage balance.
Borrowers do not have to pay any extra fees to accelerate a bi-weekly mortgage. Some lenders and companies offer bi-weekly mortgage acceleration programs for upfront and monthly fees; however, you can accelerate your mortgage for free. Most bi-weekly mortgage acceleration companies are not worth the extra cost because they do not do anything that borrowers cannot do on their own. Borrowers do not need to pay a company to implement a bi-weekly mortgage acceleration program or to pay more than their required payment. Additionally, in the past many companies offering bi-weekly mortgage acceleration programs have engaged in fraud. Borrowers should research bi-weekly mortgage acceleration programs very carefully and generally avoid them.
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Kritt, Erica. “Mortgage Moves: How much can you afford?” CFPB. Consumer Financial Protection Bureau, March 21 2016. Web.