Many people are paid on a biweekly basis. This calculator helps homeowners pay off their loans faster by having them pay half of their regular monthly payment every other week. There are 52 weeks in a year, making 26 biweekly periods, which is like making a thirteenth monthly payment each year.

For the calculated results to work correctly please enter the principal and interest portion of your loan payment into this calculator exclusive of other costs like home insurance, property taxes and HOA fees.

Your Current Mortgage Info
Remaining mortgage balance:
Monthly mortgage principal & interest payment:
Loan interest rate (APR %):
Returns on invested savings:

Your Results	Monthly	Biweekly
Years to pay off:
Interest savings:
Monthly payments eliminated:
Total payment savings:
Equity after 5 years:
Equity after 10 years:
Balance due after years:
Average monthly savings:
Average annual savings:
Cash available after years:*

Understanding How Biweekly Mortgage Payments Work

Unlike other consumer loans, mortgage payments are amortized. They have a specific time table, with terms that last between 15 or 30 years. With a fixed interest rate, your monthly payments are set in stone. You will clear your debts on the maturity date and pay the amount of interest you signed up for. That is, assuming you don’t default.

These steady payments are a boon for most homeowners. You won’t need to worry about balances that pile on like you would with credit cards. And that predictability means that you don’t need to worry about what you’re getting into.

But what happens if you pay it down faster anyway?

Much like consumer debts, paying extra can get you closer to clearing your debt. In the process, you can save thousands in interest and improve your cash flow. There are many ways to do this. You could pay a little extra with each monthly payment. Likewise, you could add any extra money you acquire to your mortgages.

By design, one way to incorporate extra payments into your mortgage is to change the way you pay. Consider asking your lender for a biweekly payment schedule.

The Biweekly Advantage

Biweekly means every two weeks. Most people would parse this as “twice a month” (semi-monthly), and in most cases it is. This is because we see most months as 4-week periods.

Biweekly payment systems take advantage of the quirks of the Gregorian calendar. Unlike true semi-monthly payments, biweekly payments do not map to each month with precision. Only one month, February, has 28 days. The rest have either 30 or 31. Thus, there will be months where you can expect three payments. Moreover, there are about 52 weeks in a year, as opposed to 48.

Rather than 24 semi-monthly periods, you make payments over 26 biweekly periods. You are, in effect, adding an extra payment to your mortgage equal to one more month. And because your annual payment comes in 52 parts, you also pay a much smaller amount every two weeks.

Hacking the Calendar

Whether in metric or imperial, time is measured in unusual increments that don’t map to each other well. Earth moves around the Sun for about 365.25 days. That is a number that isn’t divisible by either 12 (months) or 7 (weeks). And it gets more complicated when we start dividing the day. Of all the units of time, the second is the only one divisible by ten.

People often ignore the 60-60-24 daily cycles when talking about finance. We do rely on days, weeks, and months to track our payments, though. That leads to complications when computing things over long time horizons. And we’re not even factoring in holidays and weekends yet. That level of nuance is why finance is done in rounded increments of years and months.

Did You Know?

Monthly mortgage payments often have a 15-day grace period to account for payments that run late because of bank issues. It’s a good safety net to remember, but you still shouldn’t push your luck.

The incongruence of the units of time is felt whenever we wait for paychecks. Making sure everything gets paid on time is hard enough. Biweekly payments use this annoyance to your advantage, but it can also backfire. Make sure you have at least an extra payment or two in reserve to keep yourself from falling behind.

Perks and Drawbacks

Extra payments for mortgages have their pros and cons. The chief benefit of them all is that you save money on future interest payments. When applied to the principal, extra payments whittle away at your debt. You also build up more equity in your home. And compared to most investments, mortgage payments are relatively secure. The amount you save is almost guaranteed, especially when compared to volatile stocks. Finally, once your mortgage is paid, you’ve opened up more of your money for saving and spending.

It’s not all positive, though. Paying off your mortgage comes with its own disadvantages. You lose one of your key tax deductions this way. Your extra money might also come to waste if they’re not invested because of inflation.

The biweekly route has two key advantages over other payment methods. One is that it maps better to how people are often paid. Most people get paid twice a month. People who pay biweekly will often send their payments as their money arrives. The mortgage payments also blend better into your budget, making late payments unlikely.

A quirk of the biweekly payment schedule is the smaller payment increments. Each payment is much less than you would otherwise have if you paid every month. Even though you’re paying more, its financial impact on your budget will be much less obvious.

There’s a Catch

Isn’t there always? There are disadvantages to paying something like your mortgage every two weeks. Foremost of these are the upfront costs. Your lender or a service provider will charge you setup fees to get your plan started. Citibank, for instance, charges a $357 enrollment fee and a $1.50 per draft. This could add up over time.

The payments could also come at you fast. You wouldn’t have the time buffer you once had when you paid your mortgage every month. If you want to set up a biweekly payment plan, you must plan on sticking to it at all costs. The biweekly system is less forgiving of late payments.

The chief advantage of biweekly payments is also its main weakness. There will be some months where you would need three biweekly payments in a row. To avoid late payments, you’ll need to have some cash set aside to cover for these payments.

Finally, you may need to reconsider paying down your mortgage at all. Other debts might cost you more money in the long term. Focus on these before you think of paying off your mortgage. Even if you don’t have other debts, your money might be better off used elsewhere. Emergency funds, daily needs, and other everyday expenses can supersede aggressive mortgage payments.

Lender vs. Service

Not all lenders provide the option to set up a biweekly payment schedule. Some homeowners turn to third-party services for that. This comes with a few risks. First off, they often charge high setup fees of up to $400. They may also saddle you with monthly fees and punitive contracts that are hard to cancel.

You must also beware of services that don’t work as advertised. Less scrupulous providers often hold onto your second payments. Instead of paying your lender extra, they simply make monthly payments on your behalf. This pointless exercise defeats the purpose of second payments. If you must rely on a third-party, look for one that’s reliable.

Payment Breakdown

How much interest can you save through a biweekly payment plan? Suppose you have a 30-year mortgage worth $220,000 with a 3.5 percent annual percentage rate. Your high-interest savings account, meanwhile, offers a 2.5 percent interest rate. Let’s also assume that you would pay $1,000 in principal and interest each month. Here’s how much you can save:

30-Year Fixed-Rate Mortgage
Loan amount: $220,000
Interest (APR): 3.5%
Monthly payment: $1,000

	Monthly	Biweekly
Years to Pay Off	29.42	25.67
Interest Savings	0	$19,308.30
Monthly Payments Eliminated	0	45
Total Payment Savings	0	$45,000.00
Equity After 5 Years	$23,885.44	$29,444.93
Equity After 10 Years	$51,904.89	$64,085.41
Average Monthly Savings	0	$62.69
Average Annual Savings	0	$752.27

About halfway through the 25th year of your mortgage, you would still need to pay $39,814.69. Through biweekly payments, you would’ve cleared it off. Let’s also assume that you saved the money that’s no longer going to your mortgage. You would’ve earned an extra $2,125.46 in interest. This nets you a total of $47,125.46 before the 30-year maturity of your mortgage.

It takes a little discipline to pay twice or thrice a month, but it pays off well. The hardest part is, of course, making sure your budget can take it.

Do It Yourself

You don’t need to divvy your monthly payments to get the same effect as a biweekly payment plan. Do a bit of math and find out the amount you can use to pay a lump sum equivalent of your biweekly payment. Take the principal and interest parts of your monthly payment and divide it by twelve.

= $1,000 / 12
= $83.33

You have the option of adding this fraction to your monthly payment or as a lump sum toward the end of the year. One advantage of this method is that you bypass the need to set up anything with your lender or a service. You’ll skip out the charges but still gain the benefits.

We at Pigly believe in sidestepping charges for things you could do by yourself for free. In the following examples below, let’s assume you’ll apply this method instead of talking to your lender.

Pigly's Tip!

Most mortgages payments include the principal, interest, and escrow charges (tax and insurance). If you pay an extra monthly payment, you could have an excessive escrow balance. You won’t be getting any of that back until your loan account closes. When calculating your biweekly mortgage payments, subtract your escrow fees. This will leave you with money earmarked for principal payments.

Savings Comparisons

A biweekly payment system distributes a thirteenth month’s payment over 26 increments. One of the big drawbacks of biweekly payments is that you aren’t paying any more than that extra month. If you want to speed up your repayment, you can dedicate a larger part of your budget to paying down your mortgage.

As that one meme says, "why don't we have both?"

Using our accelerated mortgage payment calculator, let’s analyze our next example. Here, we’ll assume a 30-year mortgage worth $200,000 with a 3 percent annual percentage rate. Your pay around $1,143.21 each month. To avoid prepayment penalties, you waited three years before beginning your accelerated payments. As with the last time, let’s assume your savings account earns you 2.5 percent per annum. Here’s where you would stand:

30-Year Fixed-Rate Mortgage
Loan amount: $200,000
Interest (APR): 3%
Monthly payment: $1,143.21

Current Mortgage Payment Less Escrow	$843.21
Interest Already Paid	$17,443.81
Current Approximate Balance	$187,088.32

You can afford both the biweekly payment and an extra $100 to spare toward your bills. Here’s how your expenses would compare:

	Current	With Extra Payments	Biweekly Payments	Biweekly Plus Extra Payments
Full Mortgage Payment	$1,143.21	$1,243.21	$560.07	$610.07
Mortgage Principal and Interest	$843.21	$943.21	$421.60	$471.60
Years to Pay Off	27	22.9	24.0	20.4
Interest Savings	0	$14,457.33	$10,885.15	$22,913.76
Monthly Payments Eliminated	0	49	36.5	78.9
Total Payment Savings	0	$41,317.20	$30,744.66	$66,548.58
Equity After 5 Years	$37,185.70	$43,650.37	$41,749.11	$48,757.57
Equity After 10 Years	$65,382.80	$79,356.95	$75,250.53	$90,400.96
Balance Due After 20.4 Years	$60,379.61	$26,634.47	$36,469.37	0

Now let’s see how much you’ve saved:

	Current	With Extra Payments	Biweekly Payments	Biweekly Plus Extra Payments
Average Monthly Savings	0	$52.57	$37.86	$93.50
Average Annual Savings	0	$630.87	$454.28	$1,121.95
Equivalent Interest Rate	3.00%	2.29%	2.39%	2.04%
Investment Returns	0	$6,219.18	$731.04	$4,720.49
Cash Available at End of Original Term	0	$47,536.38	$31,475.70	$71,269.07

When it comes to paying down your mortgage, the size of your extra payments matter. By itself your biweekly payment contributed the smallest amount possible among the three. Thus, it had the smallest returns. Adding an extra $100 to the biweekly payment plan, meanwhile, generated the biggest returns. 

Don’t discount the savings you make, though. You still saved thousands on interest payments thru biweekly payments alone. If you can’t afford to start paying higher amounts, it’s a good number to aim for. Once you can make extra payments on top of that, do so. It’ll save you a lot more in the long run. 

A Word on Refinancing

If interest rates change, you might consider a more permanent reduction through refinancing. Experts have suggested that refinancing could’ve saved homeowners billions in interest payments. But why have so few people sought this avenue? The answer lies in its costs. Getting a new mortgage at 2 percent lower rate isn’t a bad deal. But could you afford it?

Besides changing your rates, refinancing can also change the term of your mortgage. This could mean higher monthly payments. Moreover, you may also shoulder extra upfront costs to process your new mortgage. The closing cost for refinancing is usually between 2 percent to 6 percent of your loan amount. If you can afford it, though, refinancing your mortgage can give your finances a big boost. It’s certainly a good idea if you have an adjustable-rate mortgage and want to lock in a low annual rate. Check out our guide on our mortgage refinance calculator for more information.

Lump sum payments whenever you find them can also play a role in whittling down your mortgage. Every time you have windfall cash (prize money, gift money, spare change, tax refunds), consider saving that money for mortgage payments. It may be small or periodic, but it’ll do its part.

Prepayment Penalties and How to Avoid Them

You might think that, as with any debt, you’re better off clearing it sooner. Think again. Besides losing tax deductions, you also risk triggering a prepayment penalty. These can cost you up to 2 percent of your outstanding balances for the first two years. Before 2014, this amount can be much higher.

Penalties protect lenders from losing too much money through early repayment. However, they’ve become a bane for people planning to sell their home or refinance their mortgage. And that feeling is understandable.

Today, new laws restrict prepayment penalties to the first three years of your mortgage. In the past, this could last up to five years from the consummation of your mortgage. Some lenders can slap you with a prepayment penalty throughout the lifetime of the loan. If you took out your mortgage before 2014, ask your lender about your penalties.

Not all lenders apply penalties to their loans, and most can waive them if you ask. Be sure to shop around for lenders. Before you sign up, check the contract with care for any clause that suggests a penalty.

If you already have a mortgage with penalties, find out how long it lasts. Often, the best thing you can do is wait them out. Ask your lender if they allow a few extra payments during the penalty period.

Other Tips

Pigly's Tip!

Remember, your debt repayment strategy is only as good as your capacity to pay.

Before you choose a biweekly payment plan, understand if your budget can handle it. These payments will come much sooner than you expect. Any attempt to pay down your mortgage must first fit within your budget. If you can’t afford it now, you’re better off waiting it out until you can.

Be sure to put your extra payments somewhere safe. Open a savings account dedicated to your biweekly payments. Make deposits twice a week and draw from this account on every second payment. This way, you’ll always have a payment ready even if you have three payments to make in a month.

Need to find out how much money you still owe on your home? Use our mortgage balance calculator.

About The Author

Jose Abuyuan is a web content writer, fictionist, and digital artist hailing from Las Piñas City. He is a graduate of Communication and Media Studies at San Beda College Alabang, who took his internship in the weekly news magazine the Philippines Graphic. He has authored works professionally for over a decade.