Bi‑Weekly vs. Monthly Mortgage Payments: Which One Saves You More?

 


One small change to your mortgage payment schedule can save you thousands of dollars.
Most homeowners pay their mortgage once a month. But did you know that switching to bi-weekly payments could help you pay off your mortgage faster and reduce interest significantly?

In this article, we’ll break down the difference between bi-weekly and monthly mortgage payments, how they work, the pros and cons of each, and how to decide what’s best for your financial goals.

💡 What’s the Difference Between Bi‑Weekly and Monthly Payments?

Monthly Payments:

  • You make 12 payments per year.

  • Each payment includes principal + interest.

  • This is the most common mortgage payment schedule.

Bi-Weekly Payments:

  • You make half of your monthly payment every two weeks.

  • That equals 26 half-payments or 13 full payments per year.

  • You sneak in an extra full payment each year without noticing much change in your monthly budget.

🧠 Pro Tip: That one extra payment each year can shave years off your mortgage and save thousands in interest!

📊 Example: Monthly vs. Bi-Weekly Over Time

Let’s say your loan is $300,000 with a 30-year fixed rate at 6.5% interest.

Payment TypeMonthly PaymentInterest Paid (Total)Loan Term
Monthly$1,896$382,63330 years
Bi-Weekly$948 (x26)$317,34325.9 years

💰 You could save $65,290 in interest and pay off your loan over 4 years early!

✅ Pros of Bi-Weekly Mortgage Payments

1. Faster Loan Payoff

By making 13 payments instead of 12 each year, you knock down your principal quicker.

2. Less Interest Over Time

The more often you pay, the less interest has time to build up.

3. Budget-Friendly

Smaller, more frequent payments may be easier to manage than a larger monthly payment.

📈 Highlight: You don’t need to increase your total payment. Just split it into two smaller amounts every two weeks.

⚠️ Cons of Bi-Weekly Mortgage Payments

1. Not Always Supported by Lenders

Some lenders don’t offer bi-weekly plans—or may charge a setup fee.

2. May Not Offer True Savings

If the lender just holds your payments and submits them monthly, you won’t get the interest savings benefit.

3. Harder for Some Budgets

If your pay schedule doesn’t align, bi-weekly payments can be harder to manage for variable income households.

💡 Pro Tip: Always ask your lender if the bi-weekly plan immediately applies your payments to your loan.

🧮 Can You DIY Bi-Weekly Payments?

Yes! If your lender doesn’t offer a bi-weekly plan—or charges a fee—you can do it yourself by:

  1. Dividing your monthly mortgage by 12

  2. Adding that amount to your regular monthly payment

  3. Making one extra payment a year

For example, if your monthly payment is $2,000:

  • Divide by 12 = $166.67

  • Pay $2,166.67 every month

  • You’ll make 13 full payments yearly, just like a bi-weekly schedule

🛠️ DIY Tip: Label the extra payment clearly as “Apply to Principal Only” when you make it online or via check.

📌 Monthly Mortgage Payments: The Safe Default

Pros:

  • Easy to track and budget

  • Standard and widely accepted

  • Works well with traditional salary schedules

Cons:

  • You only make 12 payments a year

  • You’ll pay more in interest over the life of the loan

  • Less opportunity to build equity faster

📉 Reminder: On a 30-year loan, most of your early payments go toward interest—not principal.

🏠 Is a Bi-Weekly Payment Plan Right for You?

Choose Bi-Weekly If:

  • You get paid bi-weekly

  • You want to build equity faster

  • You don’t mind budgeting a little tighter

  • Your lender allows true bi-weekly processing

Stick to Monthly If:

  • Your lender doesn’t support bi-weekly payments

  • You’re on a tight or variable income

  • You’d rather make occasional extra payments on your schedule

🧠 Smart Strategy: Use tax refunds, bonuses, or raises to make extra principal payments—even if you don’t switch schedules.

🔚 Conclusion: Choose the Plan That Fits Your Goals

Bi-weekly mortgage payments offer a simple way to save big on interest and pay off your loan faster, but they aren’t for everyone. What matters most is understanding your options and choosing the one that fits your income flow, lifestyle, and long-term goals.

So, what’s your mortgage strategy—will you stick with monthly payments or switch to bi-weekly?

Comments

Post a Comment