Bi-Weekly Mortgage Calculator
Use our Bi-Weekly Mortgage Calculator to determine your bi-weekly loan payment based on your loan amount, length and mortgage rate. With a bi-weekly mortgage you make a payment every two weeks instead of monthly. Making a payment every two weeks, so twenty six payments a year, is the equivalent of thirteen monthly payments, so you make an extra monthly payment every year with a bi-weekly mortgage. Making that extra payment enables you to pay off your mortgage sooner because you reduce your principal loan balance faster as compared to a standard mortgage with a monthly payment.
The amortization chart below the calculator shows how the split between principal and interest payments changes and how the principal balance gets paid down faster with a bi-weekly mortgage. For example, a bi-weekly mortgage usually gets paid off in approximately 26 years depending on your interest rate and other factors, as compare to thirty years for a standard monthly fixed rate mortgage. As demonstrated by the calculator, your required bi-weekly mortgage payment remains the same, but you have fewer payments which means your loan term is shorter. The calculator enables you to determine the payoff date for a bi-weekly mortgage and understand how many years you shave off your loan.
Paying down your mortgage faster also significantly reduces the total interest expense you pay over the course of your loan, which is the second output for our Bi-Weekly Mortgage Calculator. In simple terms, your interest cost is lower because your mortgage is outstanding for a shorter period of time. The shorter the length of time you owe money to the bank, the less interest you owe. This dynamic can save you a lot of money over your loan term relative to a monthly mortgage.
While a bi-weekly mortgage offers several advantages compared to a monthly mortgage, there are considerations as well. Borrowers must be able to afford the equivalent of an extra monthly mortgage payment per year which may not fit your budget, especially if your finances are already tight. Additionally, bi-weekly mortgages are somewhat hard to find in the United States because most lenders lack the systems to process bi-weekly payments and also probably because lenders earn less interest income with bi-weekly loans.
If a lender claims to offer a bi-weekly mortgage make sure the lender accepts true bi-weekly payments -- not bi-monthly payments -- and applies your principal payments to your loan balance when received. This ensures that your loan gets paid down faster, saving you money in the long run. We encourage you to use our Bi-Weekly Mortgage Calculator to understand the financial benefits of this loan program and determine if a bi-weekly loan makes financial sense for you.
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What Borrowers Should Know About a Bi-Weekly Mortgage
Bi-Weekly Mortgage Basics
With a bi-weekly mortgage, the borrower makes payments every two weeks instead of once a month. With a bi-weekly mortgage you make 26 payments over the course of year as compared to twelve monthly payments for a standard mortgage. Because you make payments every two weeks the required bi-weekly mortgage payment is half the amount of a monthly mortgage payment. For example, if the required monthly mortgage payment is $3,000, the bi-weekly payment is $1,500. Use our Bi-Weekly Mortgage Calculator to determine your bi-weekly loan payment as compared to a monthly payment.
How a Bi-Weekly Mortgage Saves You Money
A bi-weekly mortgage pays down your mortgage faster than a monthly mortgage for two reasons. First, true bi-weekly mortgages amortize every two weeks, which means the principal balance is reduced and the required interest payment is calculated every two weeks instead of monthly. Second, because 26 bi-weekly mortgage payments equals 13 monthly mortgage payments you effectively make one extra payment each year with a bi-weekly mortgages as compared to the twelve payments you make with a standard monthly mortgage. Making an extra payment enables you to pay down your mortgage balance faster, or accelerate your mortgage, which reduces the length of your mortgage and saves you thousands of dollars in interest expense over the life of your loan. For example, depending on the interest rate, a bi-weekly mortgage is generally four-to-five years shorter than a monthly 30 year mortgage, which means you save yourself up to five years in mortgage payments. Our Bi-Weekly Mortgage Calculator enables you to quantify your savings by showing you the earlier payoff date and lower total interest expense.
Bi-Weekly Mortgages in the U.S.
Bi-weekly mortgages are most popular in Canada and Australia and are relatively uncommon in the U.S. Many U.S. lenders do not accept bi-weekly payments because they make more money with a regular monthly mortgage. Borrowers who want to change their monthly mortgage into a bi-weekly mortgage should contact their lender to determine if they can set-up a bi-weekly payment schedule. While most lenders do not accept bi-weekly payments some lenders market bi-weekly mortgage programs. Usually the lender does not actually set-up a true bi-weekly program for borrowers and instead applies one extra monthly payment per year which reduces your mortgage balance. Borrowers, however, do not need a special lender program and should make the extra payment on their own instead of wasting money on unnecessary lender fees.
Beware of Bi-Weekly Mortgage Scams
Some companies advertise bi-weekly mortgage programs that claim to save borrowers thousands of dollars. These companies charge borrowers upfront and monthly fees to change their monthly mortgage into a bi-weekly mortgage and collect bi-weekly payments from the borrowers. In most cases these companies do not make true bi-weekly payments for borrowers and instead make a single extra monthly payment per year. Borrowers do not need to pay a company to implement a bi-weekly mortgage program or make an extra monthly payment on their behalf. Borrowers should be weary of bi-weekly mortgage services and avoid fraudulent companies.
The Important Difference Between Bi-Weekly and Bi-Monthly
Some lenders try to market bi-monthly loan programs -- when you make a loan payment twice a month -- as bi-weekly mortgages but these programs do not offer the same financial benefits to borrowers. If you make two mortgage payments a month that is the equivalent of twelve monthly payments per year which is the same as a standard mortgage. With a bi-monthly loan you do not benefit from reducing your mortgage term and total interest expense. If you are interested in a bi-weekly mortgage do not be distracted or deceived by the b-monthly alternative. Additionally, bi-weekly mortgages are especially applicable if you get paid on a bi-weekly basis -- again, that's every two weeks, not twice a month. That way you can have your loan payments automatically deposited from your paycheck which makes it easier to manage your finances.
More FREEandCLEAR Mortgage Resources
Review our comprehensive explanation of how a bi-weekly mortgage works including how it saves you money compared to a monthly payment mortgage
Use our bi-weekly mortgage acceleration calculator to determine how you can reduce the length of your mortgage and save thousands of dollars in interest expense by overpaying a bi-weekly mortgage
Understand how you can apply mortgage acceleration to reduce your loan term and shave monthly payments off of your mortgage
Compare mortgage rates and fees from top lenders near you. Comparing proposals from multiple lenders is the best way to find the mortgage with the lowest rates and fees
Bi-Weekly Mortgage: https://www.consumerfinance.gov/ask-cfpb/someone-offered-me-the-ability-to-make-26-bi-weekly-mortgage-payments-a-year-for-a-fee-is-there-a-way-i-can-pay-down-my-loan-faster-on-my-own-without-paying-a-fee-to-sign-up-for-this-plan-en-203/