How Bi-Weekly Mortgage Payments Save You Thousands
The surprising math behind bi-weekly mortgage payments and why making one extra payment per year makes such a massive difference to your loan timeline and interest costs.
There's a simple mortgage hack that can save you tens of thousands of dollars and shave years off your mortgage—and it only requires a minor change to your payment schedule.
It's called the bi-weekly payment method, and if you're not using it, you're likely losing money.
What Are Bi-Weekly Mortgage Payments?
Instead of making one monthly mortgage payment, you make half of your monthly payment every two weeks.
The Math is Simple:
- • 12 months per year = 12 monthly payments
- • 52 weeks per year ÷ 2 = 26 bi-weekly payments
- • 26 bi-weekly half-payments = 13 full monthly payments
- • Result: You make ONE extra mortgage payment per year automatically
That one extra payment per year—applied directly to your principal—creates a snowball effect that dramatically reduces your total interest paid and loan term.
Real Numbers: The Impact on a $300,000 Mortgage
Let's run the actual numbers on a typical mortgage:
Loan Details:
- • Loan Amount: $300,000
- • Interest Rate: 6.5%
- • Term: 30 years (360 months)
- • Monthly Payment: $1,896
Payment Comparison
Monthly Payments
Bi-Weekly Payments
Your Savings:
Why Does It Work So Well?
The power of bi-weekly payments comes from two factors:
1. You're Making An Extra Payment
That 13th payment each year goes entirely toward your principal balance. Since mortgage interest is calculated on your remaining principal, reducing it faster means less interest accumulation.
2. Faster Principal Reduction
Making payments every two weeks means your principal drops slightly faster throughout the year compared to once-monthly payments. This small timing difference compounds over decades.
How to Set Up Bi-Weekly Payments
1Contact Your Lender
Call your mortgage servicer and ask if they offer a bi-weekly payment program. Some do this for free, while others charge a setup fee ($200-$400) or monthly processing fee ($5-$10).
2DIY Method (FREE Alternative)
Don't want to pay fees? Do it yourself:
- Divide your monthly payment by 12
- Add that amount to your regular monthly payment
- Specify the extra goes to principal
Example: $1,896 ÷ 12 = $158. Pay $1,896 + $158 = $2,054 each month. Result: You make one extra payment per year!
3Use Auto-Pay
Set up automatic withdrawals from your checking account every two weeks (or monthly with the extra 1/12). Automation ensures you never miss a payment and maintains consistency.
Common Misconceptions
✗ "I can't afford bi-weekly payments"
You're not paying more per year in total—you're just splitting your existing payments differently. It's the same annual amount spread over 26 payments instead of 12.
✗ "My lender doesn't accept bi-weekly payments"
Use the DIY method! Just add 1/12 of your payment to your regular monthly amount. Same result, no lender involvement needed.
✗ "It's too complicated"
If you can set up autopay (which you should), you can set this up. It's a one-time configuration that runs automatically forever.
Who Should Use Bi-Weekly Payments?
Great For:
- People paid bi-weekly (aligns with your paycheck schedule)
- Anyone with a mortgage at 5% or higher interest rate
- Homeowners planning to stay in their home 5+ years
- Those who want automatic savings without thinking about it
Maybe Not For:
- If you're planning to sell or refinance soon (less time for savings to compound)
- If you have higher-interest debt (credit cards at 20%+) - pay those first
- If your lender charges excessive fees for bi-weekly plans (use DIY method instead)
The Bottom Line
Bi-weekly mortgage payments are one of the simplest "set it and forget it" strategies for building home equity faster and saving significant money on interest.
On a $300,000 mortgage, you'll save over $60,000 and own your home 4.5 years earlier with virtually no extra effort beyond the initial setup.
Action Steps for This Week:
- 1.Call your mortgage servicer and ask about their bi-weekly payment program
- 2.If they charge fees, calculate if DIY method makes more sense
- 3.Use our Mortgage Calculator to see your exact savings
- 4.Set up automatic payments to start next pay period