Biweekly Mortgage Payments: Pros and Cons

Paying your mortgage biweekly can be an effective way to pay off your loan early and save money on interest over time. However, like any financial decision, there are pros and cons to consider before committing to this payment plan.

One of the main advantages of paying your mortgage biweekly is that you can make an extra payment each year without feeling the financial strain of a large lump sum. By breaking your monthly payment into smaller amounts, you can more easily budget for the expense and avoid late fees. Additionally, since interest accrues daily on a mortgage, making more frequent payments can reduce the amount of interest you pay over the life of the loan. This means that you may be able to pay off your mortgage faster and save thousands of dollars in interest charges.

However, there are also some downsides to a bi-weekly payment plan. One consideration is the cost of enrollment. Some servicers charge a fee to set up a bi-weekly payment plan, which may not be worth the expense. Before signing up for the plan, it’s important to carefully review the terms and conditions to understand the total cost and any potential penalties for early payoff.

Loan Type

Purchase Refinance with Cash out Refinance

State

Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District Of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming

FICO Score

Superior (780-850) Exceptional (760-779) Excellent (740-759) Very Good (720-739) Good (700-719) Above Average (680-699) Average (660-679) Fair (640-659) Need Improvement (620-639) Poor (350-620)

Loan Amount

$

Points

Up to 0 points Up to 0.5 points Up to 1 points Up to 1.5 points Up to 2 points Up to 2.5 points Up to 3 points

LTV

%

Loan Term

 15-Year Fixed  20-Year Fixed  30-Year Fixed  5-Year ARM  7-Year ARM  10-Year ARM

Show Advertiser Disclosure

The lenders whose rates and other terms appear on this chart are ICB's advertising partners. They provide their rate information to our data partner RateUpdate.com. Unless adjusted by the consumer, advertisers are sorted by APR from lowest to highest. For any advertising partners that do not provide their rate they are listed in advertisement display units at the bottom of the chart. Advertising partners may not pay to improve the frequency priority or prominence of their display. The interest rates, annual percentage rates and other terms advertised here are estimates provided by those advertising partners based on the information you entered above and do not bind. Any lender Monthly payment amounts stated do not include amounts for taxes and insurance premiums. The actual payment obligation will be greater if taxes and insurance are included. Although our data partner RateUpdate.com collects the information from the financial institutions themselves, the accuracy of the data cannot be guaranteed. Rates may change without notice and can change intraday. Some of the information contained in the rate tables including but not limited to special marketing notes is provided directly by the lenders. Please verify the rates and offers before applying for a loan with the financial institution themselves. No rate is binding until locked by a lender.

Lender

APR / Rate

Fees / Points

Payment

NMLS #1835285

5.296%

15-Year Fixed

5.125%

$4,500

Includes 0.625 points for $2,500

Lender Fees: $2,000

$3,190 /mo

Next >

NMLS #2578474

5.389%

15-Year Fixed

5.250%

$3,650

Includes 0.650 points for $2,600

Lender Fees: $1,050

$3,216 /mo

Next >

NMLS #2059741

5.510%

15-Year Fixed

5.375%

$3,520

Includes 0.880 points for $3,520

Lender Fees: $0

$3,242 /mo

Next >

NMLS #1025894

5.632%

15-Year Fixed

5.490%

$3,688

Includes 0.747 points for $2,988

Lender Fees: $700

$3,267 /mo

Next >

NMLS #6606

5.767%

15-Year Fixed

5.625%

$3,696

Includes 0.924 points for $3,696

Lender Fees: $0

$3,295 /mo

Next >

NMLS #1835285

6.262%

5-Year ARM

6.125%

$5,848

Includes 0.962 points for $3,848

Lender Fees: $2,000

$2,431 /mo

Next >

NMLS #1835285

6.344%

30-Year Fixed

6.250%

$4,000

Includes 0.500 points for $2,000

Lender Fees: $2,000

$2,463 /mo

Next >

NMLS #2578474

6.360%

30-Year Fixed

6.250%

$4,650

Includes 0.900 points for $3,600

Lender Fees: $1,050

$2,463 /mo

Next >

NMLS #2059741

6.548%

30-Year Fixed

6.490%

$2,412

Includes 0.603 points for $2,412

Lender Fees: $0

$2,526 /mo

Next >

NMLS #1025894

6.597%

30-Year Fixed

6.490%

$4,460

Includes 0.940 points for $3,760

Lender Fees: $700

$2,526 /mo

Next >

NMLS #401822

6.758%

30-Year Fixed

6.625%

$5,495

Includes 0.875 points for $3,500

Lender Fees: $1,995

$2,562 /mo

Next >

NMLS #6606

6.823%

30-Year Fixed

6.740%

$3,392

Includes 0.848 points for $3,392

Lender Fees: $0

$2,592 /mo

Next >

NMLS #401822

7.764%

15-Year Fixed

7.500%

$6,500

Includes 0.625 points for $2,500

Lender Fees: $4,000

$3,709 /mo

Next >

Rate data provided by RateUpdate.com. Displayed by ICB, a division of Mortgage Research Center, NMLS #1907, Equal Housing Opportunity. Payments do not include taxes and insurance premiums. Actual payments will be greater with taxes and insurance included. Rate and product details.

Another potential disadvantage is that not all lenders or servicers offer bi-weekly payment plans. If your servicer does not offer this option, you may need to switch lenders or refinance your loan to take advantage of this payment plan. This can be a complicated and time-consuming process that may not be worth the effort.

If you are considering a bi-weekly payment plan but don’t want to pay a fee, there are other ways to achieve the same goal of paying down your loan faster. For example, you can make one extra mortgage payment per year on your own or add a little extra to your monthly payment each month. This approach may require more discipline and planning on your part, but it can be an effective way to pay off your loan early without incurring any extra fees.

Biweekly Mortgage Payment Example:

Let’s say you have a $300,000 30-year fixed-rate mortgage with an interest rate of 6.00%. The monthly payment for this mortgage would be approximately $1,798.65.

If you were to make bi-weekly payments, you would pay half of this amount every two weeks, or $899.33. Over the course of a year, you would make 26 bi-weekly payments, or the equivalent of 13 monthly payments.

By making these extra payments, you would reduce the amount of interest you pay over the life of the loan. In fact, by making bi-weekly payments instead of monthly payments, you could save thousands of dollars in interest charges over the course of the loan.

Assuming you make bi-weekly payments throughout the life of the loan, you would pay off your mortgage in approximately 25 years and 11 months instead of 30 years. You would also save approximately $37,000 in interest charges over the life of the loan.

It’s important to note that the amount you save in interest charges will depend on a variety of factors, including the size of your mortgage, the interest rate, and the length of the loan. However, in general, making bi-weekly payments can be a smart way to pay off your mortgage faster and save money on interest over time.

In conclusion, paying your mortgage biweekly can be an effective way to pay off your loan faster and save money on interest charges over time. However, it’s important to carefully review the terms and conditions of any payment plan before committing to it. Be sure to consider the cost of enrollment, any potential penalties for early payoff, and whether this payment plan is the best option for your financial situation. If you are unable or unwilling to pay for a bi-weekly payment plan, there are other strategies you can use to achieve the same goal of paying down your loan faster, such as making an extra payment each year or adding a little extra to your monthly payment.