Question:

How to compare biweekly vs monthly mortgage payments?

Answer:

Biweekly vs monthly mortgage payments can lead to reduction of the interest, paid on the loan, and cut years of the loan term.

You need a calculator for exact calculation of bi-weekly vs monthly mortgage payment benefits.

For example, a $250,000 loan taken for a 30-year period and 7.5% interest rate leads to over $93,000 savings from interest and 78 months shorter loan, if you started with the bi-weekly payment right away at loan inception.

Bi-weekly mortgages work as follows: the monthly mortgage payment is split in two and is sent every two weeks. At the end of the year you have made 26 biweekly payments equaling 13 monthly mortgage payments. This is how principal is reduced in accelerating fashion and the loan term and interest payments decrease.

Biweekly and bimonthly mortgage plans are not one and the same thing, even though they are often mistaken to be.

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