Question:

What is a semi-monthly mortgage payment?

Answer:

The semi-monthly mortgage payment, also called bi-monthly mortgage payment, is often mistaken for a biweekly payment. However, a semi monthly mortgage payment does not have the effect of a biweekly payment plan - not at all.

Semi-Monthly Mortgage Payment Not To Be Mistaken For Biweekly

With a semi monthly payment, you are splitting your payment in half and applying it twice a month - on the 1st and 15th of the month. With a biweekly payment plan, you are making half a monthly payment every two weeks, which results in one additional full 13th monthly payment a year.

The semi-monthly mortgage payment doesn't have the cumulative effect of biweekly plans. If you have heard of a bi-monthly or semi-monthly mortgage payment to help reduce your mortgage term faster, you heard it wrong. When talking about accelerated payment plans, a bimonthly mortgage payment will have very little effect over the loan amortization schedule - perhaps it would be reduced with one or two months.

A true or standard biweekly mortgage payment will reduce your mortgage repayment period with months and thousands of interest.

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Common misspellings: mortage and morgage