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THIRTEEN PAYMENTS
What a biweekly mortgage payment actually is.
Half the monthly payment, taken every two weeks, is not a different interest rate. It is one extra full payment a year, applied to principal.
A monthly mortgage is billed twelve times. A biweekly draft happens twenty-six times, because there are twenty-six fortnights in a year, not twenty-four. Twenty-six halves are thirteen wholes. You paid the bill for the year, plus one more payment, and that extra payment reduces principal.
Some third-party “biweekly programs” charge a fee to do this and then simply forward the extra money. You can send the same extra principal yourself, as one extra payment or as a bit more every month, and skip the fee. The payoff calculator has a box for that pattern. It adds one full scheduled payment once each year on top of any extra monthly principal you type.
What it does not do
It does not change the note rate. It does not remove PMI on the statutory schedule by itself. It does not help if the servicer holds the half-payments in a suspense account and only applies them once a full payment is assembled, which is common. In that setup you still get the thirteenth payment, but you do not get interest credit every fourteen days. Anyone selling biweekly drafts as “interest charged every two weeks” is describing a loan you probably do not have.
Questions
Is biweekly the same as paying half a month early?
No. The value is the thirteenth payment, not the two-week timing.
Will my servicer set this up?
Some will draft every two weeks. You can also divide one extra monthly payment by twelve and add that amount to each monthly payment.
Twenty-six is not twenty-four
People divide the monthly payment by two and multiply by twenty-four, then wonder why a “biweekly” plan costs more. There are twenty-six fortnights in a year, not twenty-four. Twenty-six halves are thirteen monthly payments. The extra one is principal. If your servicer holds half-payments in a suspense account until a full payment is assembled, you still get the thirteenth payment, but you do not get interest credit every fourteen days. Anyone selling biweekly drafts as “interest charged every two weeks” is describing a loan you probably do not have.
You can get the same thirteenth payment by adding one twelfth of the monthly payment to each monthly bill. The calculator has a checkbox for the yearly extra and a box for a monthly extra. They stack.
The same extra, two ways of sending it
On a payment of about $2,528, one extra payment a year is $2,528 of principal. Spreading it across twelve months is about $211 a month. The payoff calculator accepts either shape: the biweekly checkbox for the yearly extra, or the monthly extra box for $211. Using both counts the extra twice. Interest saved depends on the rate and the remaining term. A 3% loan saves less than a 6.5% loan because the rate being avoided is smaller. The page does not change the note rate.