Keller Williams Realty Professionals

How to Use a Bi-Weekly Mortgage to Your Advantage

by The Troy Team 05/23/2021


Photo by Designer491 via Shutterstock

The term “bi-weekly” means every other week. If you get paid bi-weekly, you usually get your check every other Friday. When it comes to a mortgage, typical amortization plans (payments of principal and interest) use a 30-year/360-month calculation. But many lenders offer a bi-weekly plan too.

In this case, you would make 26 payments a year. When your paycheck is also bi-weekly, this option works fantastically. When you do this, you effectively make 13 monthly payments in a year. While some lenders won’t accept two half payments mailed to them each month, they will set up automatic deductions bi-weekly for you. 

Can you do it faster?

A bi-weekly plan will pay down your loan more quickly than twelve monthly payments, but can you do more to get your house paid off?

Here are some options to add to your plan and get your mortgage paid off sooner:

  • Round up: If your bi-weekly payment is $762 a month, round it up to $800. That extra $38 against your principle lowers the overall interest you’ll pay. If you can round it up higher, do so.
  • Use your bonus: Annual bonuses from work often go toward holiday gifts and other expenses, but if you really want to pay your house down, add it to your last payment of the year.
  • Use your tax refund: If you get a refund from the government every year for overpaying your taxes, apply it to your house. A few hundred or thousand dollars extra every year makes an enormous difference in the interest you pay and how soon that property belongs to you in full.

Online calculators can help you determine what adding just a small amount to your payment can do to reduce the time it takes to fully amortize your mortgage. Plugin different numbers to see what works for you.

If you haven’t yet purchased your house, your real estate agent can get you started, so give them a call today. Then set your budget, buy your house, and put your plan into action.

About the Author
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The Troy Team

Hi, I'm Troy Stevens and I'd love to assist you. Whether you're in the research phase at the beginning of your real estate search or you know exactly what you're looking for, you'll benefit from having a real estate professional by your side. I'd be honored to put my real estate experience to work for you.