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Biweekly Mortgage Payments

Updated on June 14, 2010

The chances are good that if you own a home and have a mortgage then you have heard the phrase "biweekly mortgage plan". Mortgage companies all over are pushing these repayment plans - and not because it is in your best interest. There is definitely something in it for them. So what exactly is a biweekly mortgage payment and is it right for you?

The majority of home owners pay their mortgage once a month, or twelve times a year. With the biweekly payment method you will end up making a half payment every two weeks or 26 times a year. You can do the math quickly and realize that this means you are paying one extra month's mortgage payment each year if you go with the biweekly payment plan. Mortgage companies advertise that this will cut six to eight years off the length of your mortgage which is a tremendous savings in interest payments.

There are some things to think about though before signing up for this plan. First, the mortgage company is in control of the payments. Companies typically require an automatic draft from your checking account. Honestly I don't like giving companies my checking account information; I have heard too many horror stories of them taking advantage of the customer. Because of this automatic draft you are not in control of when the payment is made. My husband gets paid 26 times a year and the dates vary greatly each month. Sometimes I pay my mortgage on the 20th, and sometimes on the 30th. With a biweekly plan you are locked into exactly when the debit is made.

Another thing to consider is how many times you get paid. We have been paid every two weeks, twice a month, and monthly. Some people get paid weekly. If you don't get paid every two weeks, then the biweekly plan might not work well for you. Something else to think about is that while you might get paid biweekly now, there is a chance that you won't always be paid that way. It is my understanding that once you are locked into a plan, then you can't change it.

The only benefit I see for the home owner is paying off their mortgage sooner. Yet the benefit to the mortgage company is much greater. First they get your money, every two weeks through automatic draft. They don't have to wait for their money. Second, they get to earn interest on your money. From everything I have read when you are on the biweekly payment plan your payment does not get applied to your mortgage every two weeks. It gets applied once a month, just like most people normally pay their bills. The mortgage company holds onto your first payment of the month and earns interest on it until the second payment is made and then they pay the mortgage.

There are a lot of fees involved in a biweekly payment plan too. Just to sign up for this program can cost hundreds of dollars. Many companies also charge a small fee for the auto draft every two weeks. While this might just cost $3 each time, over the course of a 20 year mortgage that equals $1560. Combine a few hundred dollars start up fee, with the $1560 payment fees, and the interest the company earns on your mortgage and the company has earned an extra few thousand dollars off of your mortgage.

I'm sure it sounds as if I don't think anyone should pay their mortgage every two weeks, but that isn't the case. I think that the home owner can do this plan on their own and avoid all the fees. You can save yourself thousands of dollars by making the payment yourself every two weeks on top of savings tens of thousands of dollars in interest by paying off your mortgage early. So rather than paying the mortgage company to do this for you make sure you do it yourself. Figure out a way to make one extra payment a year (either from bonuses, tax refunds, three paycheck months, etc) and you will reap all the benefits of the biweekly payment plan without all the fees involved.


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    • mortgage-news profile image


      7 years ago from Los Angeles, CA

      This is great advice, especially in a climate of record low mortgage rates!

    • profile image

      mortgage company 

      8 years ago

      thanks for the info. Good to know your options for mortgages and payments. nobody like debts.

    • profile image


      8 years ago

      Many of us don't know about Biweekly Mortgage Payment Plans. Useful and informative information. This Biweekly Mortgage plan is a good idea to save money on mortgage plans, but it is not applicable for all mortgage plans..

    • bayareagreatthing profile image


      8 years ago from Bay Area California

      The one thing that always seems to be a certainty, whatever it is,if the mortgage company promotes it, it is in THEIR interest, not yours. Great hub and warning to all. You can always pay extra with your monthly payment and net the same effect and you keep control. If you do this however, make sure you note the amount to be applied to principal and the amount to be applied to your regular payment, otherwise they may just hold the extra amount in limbo.

    • profile image


      8 years ago

      I agree too, "biweekly plans" is good idea for people who wants to save money and pay less every month compared to full monthly fee. The article is great!

    • Wendy Krick profile image

      Wendy Krick 

      8 years ago from Maryland

      This is a good idea. Great information here.

    • H P Roychoudhury profile image

      H P Roychoudhury 

      8 years ago from Guwahati, India

      Better to do math first and proceed with the plan as the great man's saying is that better to think first and not afterwards.

    • Hello, hello, profile image

      Hello, hello, 

      8 years ago from London, UK

      Very informative and helpful hub for people who strangle to make ends meet.

    • profile image


      8 years ago

      nice post..i agree with shiela, the last paragraph says it all..

    • sheila b. profile image

      sheila b. 

      8 years ago

      I hadn't heard about these plans. You explained them so well, pros and cons, and your last paragraph made complete sense. If I was in the market for a mortgage, I'd listen to you.


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