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Bi-Weekly Mortgage Payment Formula:
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The bi-weekly mortgage payment is half of your monthly mortgage payment plus any extra amount you choose to pay, made every two weeks. This results in 26 payments per year (equivalent to 13 monthly payments), which can significantly reduce your loan term and interest paid.
The calculator uses the standard mortgage payment formula adjusted for bi-weekly payments:
Where:
Explanation: The formula first calculates the standard monthly payment, then divides it by 2 for the bi-weekly amount and adds any extra payment you specify.
Details: Making bi-weekly payments can shorten your loan term by several years and save thousands in interest because you're making the equivalent of one extra monthly payment each year.
Tips: Enter your loan principal, monthly interest rate (annual rate divided by 12), loan term in months, and any extra amount you plan to pay with each bi-weekly payment.
Q1: How much can I save with bi-weekly payments?
A: On a 30-year mortgage, bi-weekly payments can typically reduce the term by 4-6 years and save 20-25% of total interest.
Q2: Is bi-weekly better than monthly with extra?
A: Mathematically similar, but bi-weekly provides automatic discipline. Some lenders offer bi-weekly programs that handle the scheduling for you.
Q3: Do all lenders accept bi-weekly payments?
A: Most do, but some may charge a fee. Check with your lender about their specific policies.
Q4: How does this compare to weekly payments?
A: Weekly payments would be monthly payment divided by 4. Bi-weekly is more common as it aligns with many pay schedules.
Q5: Can I change back to monthly payments later?
A: Yes, but you'll lose the accelerated payoff benefits. Some lenders allow temporary suspension of bi-weekly payments if needed.