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    Paying your mortgage biweekly — half your payment every two weeks, to be exact — can be a smart way to reduce your interest costs and even pay off your loan sooner. But is it right for everyone? Definitely not. Are you considering skipping those monthly mortgage payments instead of a half-payment every two weeks? Here are the pros and cons you’ll want to consider.

    How do Biweekly Mortgage Payments Work?

    Bi-weekly mortgage payments are a payment schedule where the borrower pays half of their monthly mortgage payment every two weeks, instead of the full payment once a month.

    This results in 26 half-payments, or 13 full monthly payments, over the course of a year, effectively reducing the loan term and the amount of interest paid over the life of the loan.

    However, some lenders may charge extra fees for this payment option, so it’s important to understand the terms of your mortgage agreement before choosing this option.

    Pros and Cons of Biweekly Mortgage Payments

    The biggest benefit of paying every two weeks is that it essentially means you’re making an extra payment every year.

    If you’ve got a 30-year loan, that can help you pay off your mortgage two years sooner or more.

    What are the benefits of paying your mortgage bi-weekly?

    • It can reduce the total interest you pay over time. Because you’re lowering your balance every two weeks, your interest costs will reduce that often, too. Your extra annual payment can also make a dent in the interest paid over time.
    • It can make payments more manageable. For many people, paying $600 every two weeks is easier than making a large $1,200 payment all at once. It might also make budgeting easier on the whole.
    • It can help you build equity up faster. You’ll own a bigger stake in the home faster. That means more in profits when you sell the property or more to tap via a cash-out refinance.
    • It can help you drop private mortgage insurance sooner. If you’re paying PMI, biweekly payments will help you reach that 20 percent equity point faster, allowing you to cancel PMI and reduce your mortgage costs.

    On the downside, biweekly payments do actually require more in payments annually. If you’re on a tight budget, this might cause cash flow problems in your household.

    What are the disadvantages of paying your mortgage bi-weekly?

    • Not all loan servicers offer this option. Some may accept your biweekly payments, but they only make payments toward the loan monthly. This means your extra work has virtually no effect on your balance or interest paid.
    • Some lenders charge a fee for biweekly payments. It might not be cost-effective to enter this program, depending on the fee.
    • Some biweekly payment plans are permanent agreements. This means you can’t switch back to monthly payments if cash is tight.

    Biweekly Mortgage Payments vs. Extra Payment

    Bi-weekly mortgage payments and making extra payments on your mortgage both have the potential to reduce the amount of interest you pay over the life of the loan and shorten the loan term.

    Bi-weekly mortgage payments can be a convenient option, as they automatically result in making one extra payment per year, shortening the loan term and reducing the amount of interest paid over the life of the loan. However, some lenders may charge a fee for this payment option.

    Making an extra payment each year on your monthly mortgage can also help you pay off your loan faster and reduce the amount of interest paid over the life of the loan. This option gives you more flexibility regarding the timing and amount of extra payments, and there are usually no extra fees involved.

    Ultimately, the best option for you will depend on your budget, financial goals, and the terms of your mortgage agreement. It’s recommended to consult with a financial advisor or do your own research to determine the best strategy for paying off your mortgage.

    Can I Pay My Mortgage Weekly?

    Yes, you can pay your mortgage every week if your lender offers this option.

    Making weekly mortgage payments can help you reduce the interest you pay over the life of the loan. Additionally, it can also help you stay on top of your mortgage payments and manage your cash flow more effectively.

    Some lenders may allow you to make weekly payments without charging any extra fees, while others may charge a fee for this service. It’s best to check with your lender to confirm if they offer weekly payments and if there are any fees associated with it.

    Bottom Line on the benefits of paying mortgage biweekly

    Usually, your regular payment will go toward principal and interest. Still, it may also be possible to make principal-only payments at any time (as long as you make your monthly payment).

    The extra payments on the principal can reduce the amount of interest paid over time.

    You may need to specify your extra payment should only go toward the principal, so be sure to speak with your lender about it first.

    Ready to buy a home? Contact an Embrace loan officer today. We’ll help you find the mortgage that fits your budget and financial goals.

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