Biweekly Mortgage Payments: Pros and Cons

When you have a mortgage, you’ve likely considered how to pay it off early. One popular strategy for this is a biweekly (every two week) payment plan. With biweekly mortgage payments, you make 26 half-payments a year, which equates to 13 total payments in a year. It can be a good option for those wanting to contribute more money toward a mortgage, without having to commit a large amount of money. However, there are some drawbacks to this method, and you should review the current mortgage rates before making any big decisions. Consider working with a financial advisor as you manage your mortgage obligations.

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You’ll need to weigh all the factors before deciding whether to commit to biweekly mortgage payments. Let’s consider the pros and cons of entering a biweekly mortgage plan.

Pros of Making Biweekly Mortgage Payments

There are a lot of good reasons to begin biweekly mortgage payments. Here are come key points for you to consider:

1. Pay Off Your Mortgage Faster

By making one extra payment a year, your mortgage will be paid off faster.For example, if you’re buying a $100,000 home and you put 20% down, you’ll have an $80,000 mortgage. With a 30-year mortgage, it will normally take you 30 years to pay this off. But if you make biweekly mortgage payments, you will be making what equates to 13 monthly payments each year. Assuming a 6.5% interest rate and biweekly payments of $252, you would pay off your mortgage in a little over 24 years, or about six years early.

2. Build Equity

A father calculating how much he could save by making biweekly mortgage payments.

One of the reasons why homeownership is so attractive to so many people is that it allows you to build equity. Equity is your financial stake in your home. Making additional mortgage payments is one of the fastest ways to build equity. The more you’ve paid toward your mortgage, the more equity in your house you own. By making an extra payment each year, you’ll gain equity more quickly.

3. It’s Easier to Budget

If you are paid biweekly, then having a biweekly mortgage payment can make it easier to budget. By always having the same amount going toward your mortgage from each paycheck you won’t have to worry about balancing between your two paychecks.

4. You May Save on Interest

Your lender may allow you to put your extra yearly mortgage payment directly toward your loan’s principal. If this is the case, you’ll be able to pay off the principal faster which means potential savings of thousands of dollars in interest payments over the years. This is extremely beneficial if you’re also saving for retirement.

Cons of Making Biweekly Mortgage Payments

While there are distinct advantages to making biweekly mortgage payments, there are also several reasons why this isn’t the norm for most homeowners. If you’re interested in a biweekly arrangement here are some of the complications you’ll need to keep in mind:

1. There May Be a Set-up Fee

Some financial institutions will charge you a set-up fee to participate in a biweekly mortgage payment plan. Additionally, there may be an associated fee for each transaction (mortgage payment). Some banks do offer this service for free, but it’s best to check with the financial institution currently servicing your mortgage.

2. Requires You to Pay More Over the Course of the Year

Making biweekly payments amounts to making one extra monthly payment a year. That is money you may need for something else. So if you’re living with a tight budget, you may not be able to afford the additional drain on your finances.

3. It’s a Permanent Agreement

When you enter a biweekly mortgage payment program, you are making an agreement and cannot switch back and forth month to month. So if you’d rather not make a binding agreement to pay extra, you shouldn’t commit to this type of payment plan.

4. Your Payment Isn’t Applied as You Pay

Even though the payment is withdrawn from your bank account twice a month, it isn’t applied to your mortgage that way. Your mortgage servicer holds the payment and applies it once a full monthly payment is received. The biweekly payment just forces an extra payment at the end of each year. If you’d rather save and contribute that extra payment yourself, you don’t have to change to a biweekly plan. You’ll just have to check your mortgage agreements to ensure you won’t be penalized for paying the loan off early.

Alternatives to Biweekly Mortgage Payments

If you like the idea of paying off your mortgage faster but don’t want to commit to a formal biweekly plan, there are other ways to achieve similar results:

Make One Extra Payment Per Year Manually
You can simply make an additional full monthly payment each year on your own schedule. This achieves the same result as a biweekly plan—shortening the loan term and reducing interest.
Round Up Your Monthly Payments
Rounding your monthly payment up to the nearest hundred (e.g., paying $1,200 instead of $1,143) will reduce your principal faster without committing to a set program.
Split Your Monthly Payment
Instead of enrolling in a biweekly plan, you can divide your monthly payment in half and pay that amount every two weeks yourself. This approach requires manual effort but avoids automatic program fees.
Apply Windfalls to Principal
Use tax refunds, bonuses, or other irregular income to make lump-sum payments toward your mortgage principal. Even occasional extra payments can significantly cut your loan term.

Each alternative gives you some flexibility without locking you into a fixed structure. Check your mortgage terms for prepayment restrictions or fees before choosing any option.

Bottom Line

A homeowner deciding on making biweekly mortgage payments.

If you want a “set it and forget it” method for paying off your mortgage a little bit early, then a biweekly mortgage program could be a good fit. Keep in mind that nothing is stopping you from making an extra payment on your own each year if you so choose. Sending money to your mortgage lender twice a month is a matter of automation versus setting aside savings separately to pay off your mortgage early.

Tips on Mortgages

A financial advisor can provide valuable insight and guidance when it comes to mortgages. If you don’t have a financial advisor yet, finding one doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Use our free mortgage calculator to get a quick estimate of what your monthly payments will be.