What is a Bi-Weekly Mortgage?

A bi-weekly mortgage is basically a system that is setup and payments are made every 2 weeks as opposed to being repaid monthly. This can help a homeowner to realize a significant savings on interest charges over the life of a loan.

How It Works

Suppose your monthly mortgage payment is $1500, but you consistently make payments in the amount of $750 every 2 weeks. At the end of the year, you will have actually made 13 payments as opposed to 12, so with a bi-weekly mortgage, there is an additional $1500 paid on the loan that under a regular schedule would not have been made.

Be Careful!

When you make these payments, you have to tell the bank that you want this excess applied to the principal. Otherwise they have no obligation to do so, and many will simply put it on the interest, which defeats the entire purpose of paying the loan back with a bi weekly mortgage.

Over the course of time, while it may not sound like much, you will actually be saving a great deal of money in interest charges. If you are interested in this program, contact your lender to see what their procedures are for putting it into place.