Is it better to make one or two mortgage payments per month?
If the lender applies the principal payments to your mortgage balance when they are received, then paying twice a month or bi-weekly (every two weeks) is the preferred payment alternative because you pay down your mortgage faster, which reduces the length of your mortgage and saves you money. We also provide a detailed explanation of how bi-weekly mortgages work, which may be helpful to review. You can also use our Bi-Weekly Mortgage Calculator to understand how making bi-weekly mortgage payments reduces your mortgage term by several years as compared to a mortgage with a monthly payment. If the lender only applies the principal payments to your mortgage balance once a month, then paying once a month is the preferred alternative because you do not gain any financial benefit by paying your mortgage bi-monthly or bi-weekly. If you are considering making multiple mortgage payments in a month -- either bi-weekly or twice a month -- be sure to check with your lender to understand how and when the payments will be applied to your principal mortgage balance. Many lenders only apply mortgage payments once a month, even if you make multiple payments in a month, which reduces the benefits of making twice monthly or bi-weekly payments.
We also provide a thorough overview of Mortgage Acceleration, or paying more than your required mortgage payment, on FREEandCLEAR, including how mortgage acceleration works, an example of mortgage acceleration and how mortgage acceleration can be applied to different types of loans. You can also use our Mortgage Acceleration Calculator to evaluate different acceleration scenarios for your loan.
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