Making bi-weekly mortgage payments instead of monthly payments is a simple strategy to pay off your loan faster and save thousands in interest.
By paying half of your monthly payment every two weeks, you end up making 26 half-payments in a year. This equals 13 full monthly payments, which is one extra payment per year compared to a standard monthly schedule. This extra amount goes directly towards reducing your principal balance.
Benefits of Bi-Weekly Payments
- Pay Off Faster: You can shorten a 30-year mortgage by 4 to 6 years.
- Save on Interest: The faster reduction of principal means you pay significantly less interest over the life of the loan.
- Build Equity Quicker: More of your money goes towards ownership rather than interest.