Mortgage Payments: Monthly versus Bi-Weekly

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What is a Bi-Weekly Mortgage?

A bi-weekly mortgage pays half of your mortgage payment twice a month, rather than the full payment once a month. There are several things to consider about using this method to pay the mortgage. It is important to consider that this payment arrangement neither improves your credit rating nor reduces the amount of compound interest you will pay. Let’s take a look at the advantages and disadvantages associated with bi-weekly mortgage payments.

Advantages of a Bi-Weekly Mortgage

  • Many people get paid every two weeks, making paying the mortgage this way much easier for the budget.

  • Making payments every two weeks ends up making 26 payments, which would equal 13 monthly payments–an extra payment per year is applied to the principle balance of the loan. This can reduce the amount of time it takes to pay off the loan by 6 to 8 years.

Disadvantages of a Bi-Weekly Mortgage

  • There may be expensive fees to enroll in a bi-weekly payment program.

  • You can structure your budget to save half of the mortgetage every two weeks and send in an extra payment at the end of the year, to save yourself the fees related to the transcations and enrollment.


  • How long are you planning to stay in your home? If you don’t plan on being there long, it would probably be better to take the money and put it toward other uses. If you do decide to use a bi-weekly plan for just a few years, it may come back in equity when the home is sold.
  • How soon is retirement? Should you spend the extra money paying down the mortgage so you have less debt when you retire, or should you save the money toward retirement?
  • What are your other financial goals? Would getting rid of the mortgage payment sooner help or hinder the others, such as sending the children to college?
  • Is there a better way to invest the money? Could contributing to an IRA make the money you’d put toward the extra payment work harder for you?