When it comes to mortgage payments, most homeowners default to the traditional monthly schedule. But biweekly mortgage payments can offer a smart alternative—one that quietly chips away at your loan and potentially saves you thousands in interest. The key difference? It’s not just how often you pay, but how much faster you reduce your principal.
How Monthly Mortgage Payments Work
A standard mortgage divides your annual repayment into 12 equal payments. Each one typically includes four parts: principal, interest, taxes, and insurance—commonly referred to as PITI. The structure is simple, predictable, and aligns with many household budgets
How Biweekly Mortgage Payments Work
Biweekly payments split your monthly bill in half and schedule payments every two weeks instead of once a month. That means you make 26 half-payments over the course of a year—equivalent to 13 full payments instead of 12. That extra payment goes entirely toward your loan principal, which reduces the interest you’ll pay over the life of the loan and helps you pay off your mortgage sooner.
Keep in mind that this approach only works if your lender allows biweekly payments, so it’s a good idea to contact your loan servicer directly to confirm their policy.
Interest Savings and Shorter Loan Term
That one extra payment each year can make a surprisingly big impact. According to our calculations, a 30-year fixed mortgage of $300,000 at 6.5% could be paid off almost six years early with biweekly payments, while saving over $88,123 in interest.
Bi-Weekly Payments
Pros:
- Pay off your mortgage faster
- Reduce total interest paid
- Aligns well with biweekly pay schedules
Cons:
- May not be accepted by all lenders
- Some third-party payment services charge fees
- Some third-party payment services charge fees
- Requires consistent budgeting
Monthly Payments
Pros:
- Easier to automate with other bills
- Widely accepted and familiar
- Simple to track
Cons:
- Higher total interest over time
- Slower equity buildup
- Longer Loan Term
Should You Switch?
Biweekly payments can make sense if your income is stable and aligns with the payment schedule. But before you switch, make sure your lender accepts them and applies the extra amount toward principal. Some third-party services offer biweekly processing for a fee, but be cautious. For a similar payoff advantage, you can often achieve the same benefit by making one extra payment per year manually without involving a middleman.
Other Ways to Pay Off Your Mortgage Faster
Even if biweekly payments aren’t a fit, other strategies can help you cut years off your loan:
- Round up your monthly payment to the nearest hundred
- Make one additional payment each year manually
- Apply bonuses or tax refunds directly to the loan principal
- Refinance to a shorter term for faster payoff
Ready to Maximize Your Mortgage Strategy?
Small adjustments can add up to major savings. Whether you’re just starting out or looking for ways to pay off your mortgage sooner, explore more tools, calculators, and mortgage planning insights at the Central Bank Learning Center.
