Biweekly Mortgage Payment Calculator

How to use a biweekly mortgage payment calculator

This tool helps you decide whether it makes sense to accelerate your monthly mortgage payments. On the left side of the calculator, enter your loan balance, mortgage rate and the length of your loan in years. After entering these numbers, you’ll see the results on the right. These results will allow you to compare how much interest you’ll pay over the life of the loan with biweekly payments compared to monthly payments.

How does a biweekly mortgage payment work?

Most homeowners make their mortgage payments once a month. But if you begrudge every penny of interest you pay your lender, biweekly payments offer a workaround. With this option, you pay half of your normal monthly payment every two weeks and pay down your mortgage sooner.

This strategy works out to 26 biweekly payments per year, totaling 13 full monthly payments per year, rather than 12. The additional payment will apply to your loan’s principal balance, helping you pay off your mortgage sooner and save on interest. Just be sure to confirm with your mortgage servicer that the extra payments are applied to the loan principal.

Considerations before choosing biweekly payments

Every financial decision has pros and cons, and there are many things to consider before taking on biweekly payments. For instance:

  • What’s your mortgage rate? If you’ve got a 3 percent loan you locked in a few years ago, it probably makes sense to hang on to the cheap money as long as you can, rather than paying it down. But a higher rate makes the biweekly method more intriguing.
  • How does your emergency savings account look? If you’re ready for an emergency, great. If not, it might be wiser to boost your savings with the extra money before paying down the mortgage.
  • Are you maxing out your retirement savings? If your retirement accounts aren’t on course, direct the extra money there rather than paying down the mortgage.
  • Are you carrying credit card balances? Mortgage debt is considered healthy debt — but credit card debt is decidedly bad for you. If you’ve got credit card balances, pay those down first.

Pros of paying your mortgage biweekly

  • Long-term savings: The biggest upside to biweekly mortgage payments is the ability to reduce interest and save money on the overall loan cost.
  • Faster path to equity: Whether you’re planning to stay in the home forever or sell it before your loan term ends, you’ll accumulate more equity with biweekly payments. If you stay, you’ll pay off the loan sooner. In addition, if you’re still in the house, that equity also gives you a lower-cost borrowing option in the form of a home equity loan or line of credit.
  • Higher net proceeds if you sell: If you sell the home at a profit, you’ll pocket more of those proceeds versus using them to pay off your mortgage.

Cons of paying your mortgage biweekly

  • Potential impact on other savings goals: Before you commit to paying your mortgage biweekly, consider whether doing so would benefit your overall financial plan. A biweekly strategy means putting more money toward your mortgage every year, which could pull from other financial obligations like saving for retirement. Additionally, if you’re trying to pay off high-interest debt, it might make more sense to prioritize the higher APR attached to your credit card, for example. As you assess your budget, see if the savings outweigh any losses elsewhere.
  • Possible prepayment penalty: Although not common, some mortgages come with a prepayment penalty if a borrower pays off the loan sooner than stated in the repayment schedule. Carefully read your loan documents or contact your servicer to see if you’d be subject to this fee. (Keep a record of who you spoke to in case there’s an issue later on.)
  • Might require some extra setup: Lenders want to earn their share of interest, so arranging biweekly payments might not be that simple. Before making the extra payments, contact your servicer to coordinate your payment plan and verify that your additional amount will go toward the principal. Again, keep track of who you spoke with and get confirmation of your conversation in writing.