How Do You Make Bi-Weekly Mortgage Payments?


Quick Answer

To make bi-weekly mortgage payments, a borrower pays half of his monthly mortgage payment every 14 days instead of the full mortgage payment once per month. Borrowers can pay their mortgages this way by mail, online or through automatic bill-payment systems. Because there are 52 weeks in a year, bi-weekly payments result in 26 half-mortgage payments, the equivalent to 13 monthly mortgage payments.

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Full Answer

This results in substantial savings for borrowers. For example, if a borrower paid bi-weekly on a $100,000, 6.5-percent-interest-rate mortgage, he would pay the bank a total of $197,215 over the life of the loan. If he paid the regular monthly mortgage payment, his total cost would equal $227,544. The savings result from the extra $1,000 per year the borrower pays being credited to his principal balance. A borrower pays less interest on a loan when he pays the principal balance down faster. In order for this strategy to be effective, a borrower must have any automatic monthly payment arrangements stopped. He also must ensure that his lender credits half-payments when received. If the lender waits until the full mortgage payment is received to credit the payment, the borrower gains no benefit from making the bi-weekly payments. A borrower can achieve similar savings by making an extra mortgage payment each year.

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