Bi-Weekly Mortgage Payments: How One Simple Change Saves Thousands

The Bi-Weekly Payment Strategy

One of the simplest and most effective strategies for paying off your mortgage early is switching from monthly to bi-weekly payments. It requires no extra budgeting skills and works almost automatically.

How It Works

Instead of making 12 monthly payments per year, you make 26 half-payments (one every two weeks). Because there are 52 weeks in a year, this results in the equivalent of 13 full monthly payments instead of 12.

That one extra payment per year goes entirely toward your principal balance.

Real Numbers

On a $350,000 mortgage at 6% over 30 years:

• Monthly payments: Total interest = $405,434. Payoff in 30 years.
• Bi-weekly payments: Total interest = $332,761. Payoff in approximately 25 years.
• Savings: $72,673 in interest and 5 years off your mortgage.

Why It Works So Well

1. Extra annual payment: The 13th payment directly reduces principal.
2. More frequent payments: Interest is calculated on a lower average balance throughout the year.
3. Aligns with pay cycles: If you are paid fortnightly, bi-weekly mortgage payments align naturally with your income.

How to Set It Up

• Contact your lender to arrange bi-weekly payments (some offer this directly).
• Alternatively, set up automatic transfers of half your monthly payment every two weeks.
• Ensure extra funds are applied to principal reduction, not held in a suspense account.

See Your Savings

Use our early mortgage payoff calculator to compare your current payment schedule against bi-weekly payments and see exactly how much you would save.