Paying off your mortgage can take a long time — usually decades. In the meantime, it can limit your monthly cash flow, take money away from other investments, and leave you spending hundreds of thousands in interest over the long haul. Fortunately, there are ways to speed up your timeline.
In fact, by making biweekly mortgage payments rather than monthly ones, you can actually take years off your mortgage. Want to see if this strategy is the right move for your finances? Here’s what you need to know.
In this article:
How biweekly mortgage payments work
Biweekly payments are mortgage payments made every two weeks. Rather than making one larger monthly payment as you traditionally would, you’ll take that payment, split it in two, and pay that amount every other week.
The strategy results in a full extra payment every year (because there are 52 weeks in a year, biweekly payments give you 26 half-payments — or 13 full monthly payments — annually). It doesn’t sound like a big deal, but depending on your loan amount, interest rate, and term length, it has the power to shave years off your payoff time and save you thousands in long-term .
A quick note: You’ll have to talk to your loan servicer if you want to do biweekly payments. Not all servicers allow this, and, in some cases, they may charge a fee to process the additional payments. You’ll also need to ensure the servicer will apply your payment to the as soon as it’s received. Some servicers will hold the payment until your monthly due date and apply them both together. This negates the benefits of paying biweekly.
Biweekly mortgage payments vs. monthly mortgage payments
The main difference between biweekly and monthly mortgage payments is when you make your payments. With monthly payments, you’ll use the monthly due date set by your and make the payment in full by that time.
With a biweekly payment plan, you’ll make a half-payment every two weeks. Many people choose to align these payments with their paydays if they get paid biweekly. This makes it easier to afford and remember to make the payments. (You can also set up automatic payments if you feel comfortable doing so.)
This payoff strategy also makes a big difference in your repayment timeline and long-term interest costs. Here’s a look at how monthly versus biweekly payments impact a $300,000, 30-year loan with a 7% mortgage rate.
In the above example, making biweekly payments would mean paying off your loan seven years earlier and paying roughly $100,000 less interest.
Pros and cons of biweekly mortgage payments
Paying off your loan faster is one big perk of biweekly mortgage payments. This can free up money for other goals, like saving for retirement, investing, or paying for your child’s college tuition. It can also help you build home equity faster and save you lots in long-term interest. (In the example above, you’d save about $117,000).
Last but not least, biweekly payments can often be easier on your household budget, especially if you get paid every other week.
On the downside, biweekly payments may come with extra processing fees from your lender or a third-party processor if the lender uses one. You’ll actually pay more annually since you’re making 13 payments by the end of the year instead of 12, which might be a stretch on your yearly budget. It also requires more work (unless you set up automatic payments).
Other ways to pay off your mortgage faster
Biweekly payments aren’t the only option if you want to pay off your mortgage faster. You can also:
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Put occasional windfalls toward your loan: If you get a tax refund, holiday bonus, or birthday money, put it toward your loan’s principal. This will reduce your payoff time and long-term interest every time.
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Make larger payments: If you can afford to tack an extra $100 onto each monthly payment, you can also pay down your mortgage faster. Just make sure your servicer is applying that extra payment toward your principal mortgage balance, and none of it goes toward interest.
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: By saving up over the year and making one extra payment, you can shorten your loan term.
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: By refinancing your home loan into a new one with a shorter term or lower interest rate (or both), you can reduce your interest costs and shave years off your payoff time. But you’ll want to ensure the savings offset the refinancing closing costs.
There are other , so talk to a financial adviser if you’re unsure which is right for you.
Biweekly mortgage payments: FAQs
How much do biweekly payments shorten a 30-year mortgage?
That partly depends on the interest rate — but on a 30-year mortgage loan with a 7% interest rate, making your mortgage payments biweekly would allow you to pay off your loan seven years faster than with traditional monthly payments.
What are the downsides to biweekly mortgage payments?
The big downsides to a biweekly payment schedule are that it means actually paying more toward your mortgage each year (which is great in the long term but could be tough in the short term) and that it could come with extra processing fees.
Both of these repayment strategies can help homeowners pay off loans faster and pay less interest over the life of the loan. The right choice depends on your budget and the terms of your loan. Be sure to run the numbers to determine which works best for you.