Bi-Weekly vs. Monthly Mortgages: What’s the Difference?


A student who recently competed in the Ivory Homes sponsored Hack-A-House challenge posed this question: what is the advantage of paying your mortgages bi-weekly instead of monthly? Let’s take a look at the numbers.

  • Most residential mortgages require a monthly payment, resulting in 12 payments each year. If you were to make half of your mortgage payment every other week for the full 52 weeks of the year, you would end up making 13 full payments during the year. The additional payment would go entirely to the principal balance, retiring your mortgage balance much quicker than the standard payment schedule.

    As illustrated in the chart listed above, a bi-weekly payment on a $300,000, 30- year mortgage at five percent saves you approximately $53,000 in interest and nearly six years of payments.

  • While this savings is exciting, don’t send half of your mortgage payment to your lender next week. Most lenders will only accept full payments unless other arrangements have been made. Many lenders will offer bi-weekly payment programs, but you must contact ahead of time for approval.

    If your lender does not offer bi-weekly payments, consider dividing your monthly payment by 12 and increasing your regular payment by this amount each month. This strategy will save you just over $50,000 in interest and nearly five years of payments. Remember – a little extra money toward your mortgage payments each month goes a long way.

Lance Miller is CEO of Momentum Loans.

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