Your bi-weekly payment will simply be half of what a monthly payment would be for the same loan.įor purposes of amortization, the calculator assumes you will make one extra bi-weekly payment every six months, regardless of when those payments might actually occur on the calendar.
The calculator will figure your bi-weekly mortgage payments for fixed-rate mortgages of up to 40 years. Using the Bi-weekly Calculator for an Existing Mortgage But even with the low rates that have been common in recent years, a bi-monthly payment schedule can still shave several years off you mortgage and save you thousands of dollars in interest costs.
That’s because there’s more interest to take a bite out of by paying down the loan more quickly. You also build equity faster, which can speed the day you can cancel private mortgage insurance (PMI) if you put less than 20 percent down on your mortgage.īi-weekly payments are most effective with home loans that have a relatively high mortgage rate. Because of the way compounding interest works, those extra payments shorten your loan even more, and reduce your interest costs over the life of the loan as well. That extra payment doesn’t simply shorten your mortgage by one month a year. You can take the same amount out of every paycheck for your mortgage without having make a lot of changes to your budget or save up for those months when you’d be making an extra payment. For that reason, bi-weekly payments often work best for someone who is paid on a weekly or bi-weekly basis, rather than once or twice a month. Of course, that money has to come from somewhere. If instead of making monthly payments you pay half that amount every two weeks, that works out to the equivalent of 13 monthly payments – one extra payment per year. That means you’d make 26 bi-weekly payments. The savings you can get from bi-weekly mortgage payments are due to the fact there are 52 weeks a year. About Bi-weekly Payments for an Existing Mortgage
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