You’re basically spreading that extra payment across the year and getting into the habit of sending above the minimum payment every two weeks.
The biweekly system makes a lot of sense! It gives you the same overall speed boost you’d get from doubling up your end-of-the-year payment, without the pain of actually forking over double the cash at one time. Hard (you have to cough up a double payment in a single month) Census Bureau reports as the median mortgage payment-let’s chart the differences. Which is easier-scheduling 26 payments of X amount paid biweekly throughout the year? Or paying double that amount the first 11 months of the year, and four times that amount in December? Using the example of $1,600 a month-which is what the U.S. Those who like them appreciate the way you can almost sneak in that extra annual payment without much pain. After all, how convenient would it be to have the same number of annual payments as paychecks? In that case, you’re on the lookout for every extra advantage you can find to make that happen.īiweekly payments work really well for some people-especially people who get paid on that rhythm. Well that depends on how fast you want to pay off your mortgage! We assume you’re down with being completely debt-free as fast as possible. Should You Make Biweekly Mortgage Payments?
Doing some quick math here, that means you’re signing on for 26 half-size payments a year, which is like 13 full-size payments.ĭo you realize what this means? If you go the biweekly route, you’ll be sending an extra monthly payment every year without hardly feeling it! If you make a habit of that on a 30-year loan, you can cut four freakin’ years off a mortgage, depending on the interest rate! Let’s see what they are.īiweekly mortgage payments are a way to schedule your payments to happen every two weeks instead of once a month. But before you set up biweekly payments on your mortgage, there are several things you should know. It’s called making biweekly (instead of monthly) mortgage payments! It’s a smart way to add some speed as you dash out of debt. There’s something simple you can do to cut years off your mortgage payoff date.
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