How Biweekly Works
- Cadence: Pay half your normal monthly amount every two weeks (26 half‑payments).
- Effect: Roughly one extra monthly payment over a year, accelerating principal reduction.
- Cash‑flow feel: Smaller, more frequent payments can be easier to budget for some households.
Benefits of Biweekly Payments
Accelerated Payoff
By making 26 half-payments per year (equivalent to 13 full payments), you effectively make one extra payment each year, which can significantly reduce your loan term.
Interest Savings
The extra payment goes directly to principal, reducing your loan balance faster and decreasing the amount of interest that accrues over time.
Budget-Friendly
Biweekly payments are typically smaller than monthly payments, making them easier to fit into your budget while still providing the benefits of accelerated payoff.
Automatic Discipline
Setting up a biweekly payment schedule creates a structured approach to paying off your mortgage faster without requiring additional discipline or decision-making.
Simulate Biweekly in Our Calculator (No Native Toggle)
- Enter your loan details; click Calculate to see your baseline monthly payment (PMT).
- Set Monthly Extra to approximately
PMT ÷ 12(about one extra payment per year, approximating biweekly effect). - Or set Yearly Extra to 1×PMT for equivalent annual effect.
- Click Calculate again to compare time saved, interest saved, and payoff date.
Note: This is a practical approximation. Real 26 half-payments may differ slightly due to timing differences, but are typically very close.
Real-World Example: Biweekly Payment Impact
Let's examine how biweekly payments can impact a typical $275,000 mortgage at 5.75% interest:
| Scenario | Payment Frequency | Payment Amount | Total Interest | Payoff Time | Savings |
|---|---|---|---|---|---|
| Standard Monthly | Monthly | $1,609 | $305,000 | 30 years | - |
| Biweekly Simulation | Biweekly | $804.50 | $255,000 | 25 years | $50,000 & 5 years |
| Biweekly + $100 Extra | Biweekly + Extra | $904.50 | $225,000 | 22 years | $80,000 & 8 years |
Biweekly vs Monthly Extras
Biweekly alone often trims the term without changing your annual budget much. Monthly extras can be even more powerful if you can afford them consistently. Many borrowers combine both: a biweekly schedule for built‑in acceleration plus a modest monthly extra for additional savings.
- Biweekly Payments: Automatically make one extra payment per year with no change to your budget
- Monthly Extras: Deliberately add extra principal to each payment for maximum control
- Combined Approach: Use both strategies for maximum acceleration and savings
Example
On a typical 30‑year loan, moving to biweekly can shave years off the payoff timeline. Add a $100/month extra principal and the effect compounds: the balance falls faster, and each subsequent payment allocates more to principal.
Next Step
Open the Mortgage Payoff Calculator and use the above "biweekly simulation" method (Monthly Extra ≈ PMT ÷ 12 or Yearly Extra = 1×PMT) to evaluate savings; if your budget allows, you can also add a small monthly extra for further acceleration.
Considerations
- Lender policies: Some servicers offer official biweekly programs; others prefer you self‑manage.
- Fees: Avoid paid "biweekly services" if you can simply send extra principal yourself.
- Clarity: Ensure every extra dollar is applied to principal, not held as "advance payments."
- Automation: Set up automatic payments to ensure consistency and avoid missed payments
- Budget Impact: Make sure the more frequent payments fit comfortably in your budget