The Bi-Weekly Mortgage

By paying one-half of the typical monthly mortgage payment every two weeks rather than one full payment every month, a 30-year mortgage can be paid off in approximately 20 years. The 26 bi-weekly payments are the same as 13 monthly payments during the year; in other words, one "extra monthly payment."

This "extra monthly payment," along with the more frequent application of the payments against the loan balance, greatly speeds up the payoff of the loan.

Since the "extra monthly payment" is spread evenly throughout the year, it generally does not adversely affect the family budget.

Payments on the bi-weekly mortgage are generally made by automatic withdrawal from the homeowner's checking account every two weeks.

Payments of Various Size Loans and Total Interest Saved
 

$100,000

$150,000

$200,000

Interest Rate & Term in Months

Bi-weekly Payment Amount

Total
Interest
Savings 1

Bi-weekly Payment Amount

Total
Interest
Savings 1

Bi-weekly Payment Amount

Total
Interest
Savings1

7% 2 286 3 Months

$333

$34,141

$499

$51,211

$665

$68,281

7.5% 2
280 3 Months

$350

$39,745

$524

$59,615

$699

$79,490

8% 2
275 3
Months

$367

$45,910

$550

$68,862

$734

$91,814

8.5% 2
270 3
Months

$384

$52,647

$577

$78,965

$769

$105,288

9% 2
264 3
Months

$402

$59,954

$603

$89,934

$805

$119,908

9.5% 2
258 3
Months

$420

$67,837

$631

$101,758

$841

$135,674

10% 2
253 3
Months

$439

$76,282

$658

$114,425

$878

$152,563

10.5% 2
247 3
Months

$457

$85,274

$686

$127,908

$915

$170,549

11% 2
241 3 Months

$476

$94,791

$714

$142,187

$952

$189,583


1 As compared with a 30-year fixed rate mortgage.
2 Interest rate of loan.
3 Length of loan in months.

Note: All figures are approximate

This is a hypothetical illustration.

 
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P.O. Box 3029
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