Should You Make Biweekly Mortgage Payments?

When you buy a home with a mortgage, your payments are due monthly by default. In an effort to pay off their mortgages faster and pay less in interest over the loan’s lifetime, some homeowners choose to make biweekly payments instead.

But depending on how your biweekly payments are handled, they may not help you make the dent in principal you intend. Here’s what you need to know if you’re considering switching from monthly to biweekly payments.

» MORE: Biweekly mortgage payment calculator

Why switch to biweekly payments?

If you pay your mortgage monthly, like most homeowners, you’re making 12 payments a year. When you enroll in a biweekly payment program, you’re paying half your monthly amount once every two weeks instead. There are 52 weeks in a year, so this works out to 26 biweekly payments — or, in effect, 13 monthly payments.

“Because you’re making the equivalent of 13 monthly payments each year, you’ll pay less total interest while lowering your principal balance at a much quicker pace,” says Joe Zeibert, senior director of Ally Home, a division of Ally Bank in Charlotte, North Carolina.

Zeibert gives the example of a 30-year fixed loan of $250,000 at a 4% interest rate. “Biweekly payments would save a borrower nearly $30,000 in interest charges and have the loan paid off in five fewer years,” he says. Even if homeowners stayed in their home for only seven years, they would still save several thousand dollars in interest charges while paying off $10,000 more in principal, which they could then use toward a larger down payment on their next home, Zeibert says.