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Bi-Weekly Loans

A bi-weekly loan is a fixed rate mortgage set up in a fashion similar to a standard 30 year conventional loan. Both interest rate and payments are fixed. However, payments are made every two weeks instead of every month. Each payment is equal to half of what the monthly payment would be for a fully amortized 30 year fixed rate loan.

Bi-weekly loans offer a significant savings over the life of a loan. For example, if a $70,000 loan at an interest rate of 10.5% is paid on a bi-weekly schedule, instead of monthly payment plan, the borrower would save approximately $60,000 in interest. Because payments are made every two week (not twice a month), 26 payments are made each year. As interest is calculated on the remaining balance, this provides a rather large interest savings. Bi-weekly loans are generally paid off in approximately 20 to 21 year, instead of 30 years.

Although bi-weekly loans have been available for same time, especially in the Northeast and Midwest, they have not been widely promoted by lenders because of the increased servicing costs associated with handling 26 payment instead of 12 payments per year.

Bi-Weekly Mortgage Calculator

This calculator will show you how much you will save if you make 1/2 of your mortgage payment every two weeks instead of making a full mortgage payment once a month. In effect, you will be making one extra mortgage payment per year -- without hardly noticing the additional cash outflow. But, as you're about to discover, you will certainly notice the "increased" cash flow that will occur when you pay your mortgage off way ahead of schedule!

Enter the principal balance of your mortgage:
(call your mortgage lender and ask for the current payoff amount)

Enter the amount of your monthly mortgage payment:

Enter the your mortgage's current interest rate:

Interest you will pay under your current monthly payment plan:

Interest you will pay if you switch to a bi-weekly mortgage payment plan:

Bi-weekly Mortgage Interest Savings:


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