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Is a Biweekly Mortgage Payments Plan Right For You?


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My husband and I have owned a house for nearly three years, and we are constantly getting solicitations in the mail about paying our mortgage biweekly.

The letter typically goes on to say how many years you can shave off your mortgage payments and how much you can save in interest. The numbers are pretty astounding, which makes these plans tempting.

Here is some information on biweekly mortgage payments, as well as the pros and cons, to help you decide if it’s the right plan for you.

How Do Biweekly Mortgage Plans Work?

Biweekly mortgage plans split your monthly mortgage bill in half and every two weeks, you pay the halved amount. Since there are 52 weeks in a year, you will end up making 26 payments which equates to 13 monthly mortgage payments. This extra payment will go towards the principal, which results in a reduced amount of interest. The plans are typically set up by the lender or an appointed marketing company.

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Let’s look at a sample scenario. Say you have a principal of $186,281, an interest rate of 5%, and a 30-year mortgage (360 months). Your monthly payment would be $1,000, or $12,000 per year. Over the lifetime of the mortgage, you would pay $173,717.81 in interest. If you made biweekly payments instead, they would be $500, or $13,000 per year. This would reduce your interest to about $143,000 and shorten the life of the mortgage by about 5 years. That is a savings of almost $31,000!

Note: Biweekly mortgage plans are different from semimonthly (or bimonthly) mortgage plans. With a semimonthly mortgage plan, payments are made twice a month (such as on the 1st and the 15th). This saves you very little money. In fact, some lenders will only apply your payments to your loan once a month, which will save you nothing (though this may be help you keep track of your finances if you pay twice a month.)

Pros & Cons of Biweekly Mortgage Payments


  • You will pay less in interest over the life of the mortgage.
  • Your mortgage will be paid off faster.
  • If you pay biweekly, the amount of your paycheck going towards housing will always be the same. Thus, budgeting and personal finance will be made easier.
  • The plan essentially compels you to make extra mortgage payments.


  • Your lender or the appointed marketing company may charge a fee to set you up on the plan. Typically, it is around $300, and can also include a fee for each biweekly payment.
  • If you bought a home at the top of your price range, you may not have the money to commit to paying extra on your mortgage each year.

4 Alternative Ways to Save on Your Mortgage

Although the pros of a biweekly mortgage plan are appealing, there are some other things that you can do to save money on your mortgage and avoid the mortgage fees and commitment to the plan.

1. Pay More Towards Principal
If you want to avoid the fees of the biweekly mortgage plan, just pay an extra one-twelfth of your mortgage payment each month. You should have the option to pay more towards principal on your payment coupon. If you do not select this option, your lender may apply the extra amount to your next month’s payment. This will save you hundreds of dollars in fees and thousands of dollars in interest! Just be sure that the terms of your loan doesn’t include a mortgage prepayment penalty.

2. Refinance
Depending on how much you still owe on your mortgage and what interest rate you can get, refinancing your home mortgage loan might be a great option for you. If you think refinancing might be the path you want to take, talk to your mortgage broker to see how much you can save and if it would be worth the fees associated with refinancing. Consider getting a shorter mortgage term as well.

3. Downsize
Downsizing your home and your life by moving to a smaller living space can save you a ton of money. Not only will you have a lower mortgage, you can also save on utilities. You can also sell items on Amazon or eBay when you downsize.

4. Rent Out Your Space
If you have an extra room, consider renting it out. Just make sure that you vet your potential roommates to make sure they’re trustworthy, and draw up a rental agreement to protect yourself. Be warned that there are many responsibilities attached to becoming a landlord.

Final Word

Once we took the pros and cons into account, my husband and I decided to pass on the biweekly mortgage payment plan. As great as it would be to pay less in interest and get our mortgage paid off faster (only 27 more years to go!), I do not want to pay the fees when there is an alternative. This will also provide us more flexibility. If we are able to put more towards our principal in any given month, then we will do it ourselves when we make our payment.

What do you think about biweekly mortgage plans?

Casey Slide lives with her husband and baby in Atlanta, GA. She graduated from the University of Florida in 2005 with a bachelor’s degree in Industrial Engineering and worked for a prominent hospital in Atlanta. With the birth of Casey’s son in February 2010, she decided to become a stay-at-home mom. Casey’s interests include reading, running, living green, and saving money.