Biweekly Mortgage Payments: Save Years and Thousands in Interest

Biweekly mortgage payments split your monthly payment in half and pay every two weeks instead of once a month. Since there are 52 weeks in a year, you make 26 half-payments—equivalent to 13 full payments instead of 12. That one extra payment per year can shave 4-6 years off a 30-year mortgage and save $30,000-$50,000 in interest on a typical loan.

How Biweekly Payments Work

The Math Behind the Savings

Monthly payment schedule:

• 12 payments per year
• Payment due once per month

Biweekly payment schedule:

• 26 half-payments per year
• Payment due every two weeks
• Equals 13 full payments annually

The extra payment: That 13th payment goes entirely to principal, accelerating payoff.

Example: $300,000 Loan at 6.5%

Payment Type	Annual Payments	Payoff Time	Total Interest
Monthly	12	30 years	$382,633
Biweekly	13 equivalent	25.5 years	$317,000
Savings	+1 payment	4.5 years	$65,633

Why It Works

Each biweekly payment reduces principal slightly faster than monthly payments. Over time, this compounds:

• Less principal = less interest charged each period
• More of each payment goes to principal
• Snowball effect accelerates payoff

Setting Up Biweekly Payments

Option 1: Through Your Servicer

Some mortgage servicers offer official biweekly programs:

Advantages:

• Automatic and official
• May apply payments immediately
• Servicer tracks everything

Disadvantages:

• May charge setup fee ($200-$400)
• May charge per-payment fee ($2-$5)
• Fees can eat into savings

Before enrolling: Ask about all fees and whether they’re worth the convenience.

Option 2: DIY Method

How to do it yourself:

1. Divide monthly payment by 12
2. Add that amount to each monthly payment
3. Specify “apply to principal”

Example:

• Monthly payment: $1,896
• Extra monthly amount: $1,896 ÷ 12 = $158
• New monthly payment: $2,054

Same result as biweekly, no fees.

Option 3: Make 13th Payment Annually

How it works:

1. Make normal monthly payments
2. Make one extra full payment per year
3. Apply extra to principal

When to pay:

• January (use bonus/tax refund)
• Birthday month
• Any consistent time

Advantage: Maximum flexibility, no program needed.

Option 4: True Biweekly Through Your Bank

Set up automatic transfers:

1. Set biweekly auto-transfer from checking
2. Transfer to savings account
3. Make monthly mortgage payment from savings
4. 13th payment accumulates automatically

This ensures money is available without servicer program.

Savings by Loan Size and Rate

At 6.5% Interest Rate

Loan Amount	Monthly Payment	Years Saved	Interest Saved
$200,000	$1,264	4.5 years	$43,800
$300,000	$1,896	4.5 years	$65,700
$400,000	$2,528	4.5 years	$87,600
$500,000	$3,160	4.5 years	$109,500

At Different Interest Rates

$300,000 loan with biweekly payments:

Rate	Years Saved	Interest Saved
5.0%	4 years	$42,000
6.0%	4.5 years	$56,000
7.0%	5 years	$72,000
8.0%	5.5 years	$89,000

Higher rates = more savings from biweekly payments.

Biweekly vs Other Strategies

Biweekly vs Extra Principal Payments

Strategy	Monthly Cost	Years Saved	Flexibility
Biweekly	+$158	4.5 years	Moderate
+$200/month extra	+$200	5 years	High
+$100/month extra	+$100	3 years	High

Extra principal payments offer more control over the amount.

Biweekly vs 15-Year Mortgage

Strategy	Monthly Payment	Total Interest	Payoff
30-year with biweekly	$1,896 + $158	$317,000	25.5 years
15-year mortgage	$2,496	$149,280	15 years

15-year mortgage:

• Higher monthly commitment
• Much lower total interest
• Fastest payoff

Biweekly 30-year:

• More flexibility
• Still significant savings
• Easier to afford

Biweekly vs Refinancing to Lower Rate

If you can refinance to a lower rate, that may save more than biweekly payments. Calculate both options.

Best approach: Refinance to lower rate AND make biweekly payments.

Common Biweekly Payment Mistakes

Paying a Third-Party Service

The problem: Companies charge $300-$500 setup plus $5-$10 per payment to “manage” biweekly payments.

The reality: You can do this yourself for free.

Avoid: Any company charging significant fees for biweekly management.

Not Verifying Principal Application

The problem: Some servicers hold biweekly payments and apply monthly anyway.

The solution:

• Confirm payments apply when received
• Verify extra goes to principal
• Check statements regularly

Starting Too Late

The reality: Biweekly payments save most in the early years when your balance is highest.

Starting year 1 vs year 10:

• Year 1 start: Save $65,000+ in interest
• Year 10 start: Save $25,000 in interest

Start as early as possible.

Assuming Servicer Offers Biweekly

The problem: Not all servicers have biweekly programs.

The solution: Use DIY method—add 1/12 of payment monthly to principal.

Budgeting for Biweekly Payments

Aligning with Paychecks

If you’re paid biweekly, biweekly mortgage payments align naturally:

Paycheck 1: Half mortgage payment Paycheck 2: Half mortgage payment

This can make budgeting easier than one large monthly payment.

Handling the “Extra” Months

Two months per year have three paychecks (if paid biweekly):

• Use third paycheck for extra principal
• Build emergency fund
• Cover other expenses

Cash Flow Considerations

Monthly method: One payment, one due date

Biweekly method:

• Payment every two weeks
• Different dates each month
• May require more attention to cash flow

Is Biweekly Right for You?

Biweekly Makes Sense If

• You’re paid biweekly and want alignment
• You want automatic savings discipline
• You can comfortably afford slightly more per month
• You plan to stay in the home long-term
• You want to pay off your mortgage faster

Biweekly May Not Make Sense If

• You have high-interest debt to pay first
• Your budget is very tight
• Servicer charges excessive fees
• You prefer flexibility of extra payments
• You may sell the home soon

Priority Order

Before biweekly payments, consider:

1. Emergency fund: 3-6 months of expenses
2. Employer 401(k) match: Free money
3. High-interest debt: Credit cards, personal loans
4. Retirement savings: Max out IRAs
5. Then: Extra mortgage payments

Calculator: Your Biweekly Savings

How to Calculate

Step 1: Find your monthly P&I payment

Step 2: Divide by 12 = extra monthly amount

Step 3: Use amortization calculator with extra payment

Or estimate:

• 30-year loan: Save ~4.5 years
• Interest saved: ~15-17% of original loan

Quick Estimate

Your potential savings:

• Loan amount × 0.15 to 0.20 = approximate interest savings
• $300,000 × 0.18 = $54,000 (rough estimate)

Setting Up Your Biweekly Plan

If Your Servicer Offers It

1. Call and ask about biweekly program
2. Ask about ALL fees
3. If fees are reasonable (<$100 total), enroll
4. If fees are high, DIY instead

DIY Setup

1. Calculate: Monthly payment ÷ 12 = extra amount
2. Set up autopay for regular payment
3. Set up additional autopay for extra amount
4. Specify extra goes to principal
5. Verify on first statement

Verify It’s Working

After first month, check your statement:

• Did extra payment apply to principal?
• Did balance decrease more than normal?
• Are there any unexpected fees?

Frequently Asked Questions

How much can I save with biweekly payments?

On a $300,000 loan at 6.5%, biweekly payments save about $65,000 in interest and pay off the loan 4.5 years early.

Do biweekly payments hurt my credit?

No. As long as payments are made on time, biweekly payments have no negative credit impact. Paying down debt faster may actually help your credit.

Can I switch back to monthly payments?

Yes. If you’re using a servicer program, contact them to cancel. If you’re DIY, simply stop the extra payment.

Is it better to pay extra monthly or biweekly?

The result is nearly identical if you pay the same total annually. DIY extra payments give you more flexibility. True biweekly may align better with your paycheck schedule.

Does my servicer apply biweekly payments correctly?

Not always. Some hold payments until month-end. Verify with your servicer how and when payments are applied.

Should I pay off my mortgage early or invest?

It depends on your mortgage rate vs investment returns. At 6-7% mortgage rates, paying down mortgage is a guaranteed return. At 3-4% rates, investing may yield more (but with risk).

Can I make biweekly payments on any mortgage?

Yes. You can always make extra principal payments. Official biweekly programs depend on your servicer, but DIY works with any loan.