How to use the biweekly mortgage payment calculator
- Enter the loan amount, the interest rate and the loan term in years.
- Read the monthly payment and the biweekly payment, which is half the monthly payment paid every two weeks.
- Compare the payoff time and the total interest of the two schedules. The difference is the interest saved.
- Check the assumption note below about how your servicer applies half payments before relying on the result.
Formula
Monthly payment = loan x r / (1 - (1 + r)^-n), with r = rate / 12 and n = months
Biweekly payment = monthly payment / 2, paid 26 times a year
Interest each two weeks = balance x rate / 26, rounded to the cent
Interest saved = interest on the monthly schedule - interest on the biweekly schedule
Twenty-six half payments equal thirteen monthly payments a year, so you make one extra monthly payment each year.
A $300,000 loan at 6.5% for 30 years
The monthly payment is $1,896.20 and the total interest over 30 years is $382,636.71. The biweekly payment is $948.10, paid 26 times a year, so you pay $24,650.60 a year instead of $22,754.40, which is $1,896.20 more.
The loan is paid off after 628 biweekly payments, about 24 years and 2 months, with a smaller last payment of $54.75. Total interest is $294,513.45, so you save $88,123.26 and finish about 5 years and 10 months sooner.
Where the savings come from
A biweekly schedule saves interest for one reason: you pay one extra monthly payment each year. That extra money goes straight to principal and shortens the loan. You can get nearly the same effect by adding one twelfth of your payment to each monthly payment, with no change in how payments are made.
Paying every two weeks also means each payment reduces the balance a little sooner, which saves a small amount of interest. The calculation here charges interest every two weeks at the yearly rate divided by 26.
Check how your lender applies payments
Some servicers apply each half payment on the day it arrives. Others hold partial payments until they have a full monthly payment, which removes most of the benefit. Third party biweekly programs may also charge a setup or transaction fee that is not included here. Ask your servicer before changing how you pay.
To test the effect of extra payments on your own loan, use the mortgage payoff calculator, the mortgage calculator with its extra payment field, or the amortization schedule calculator.
Assumptions and limits
- Each half payment is applied on the day it is paid, and interest is charged on the actual balance.
- The interest rate is fixed for the whole loan.
- Taxes, insurance, escrow and program fees are not included. Only principal and interest are modeled.
- The monthly schedule pays the loan off in exactly the term you enter. This is not financial advice.
Frequently asked questions
Does a biweekly mortgage payment save money?
It can, because 26 half payments equal 13 monthly payments a year. The extra payment goes to principal. On a $300,000 loan at 6.5% over 30 years the saving is about $88,123 in interest in this model.
How much sooner is a mortgage paid off with biweekly payments?
In the example it is paid off in about 24 years and 2 months instead of 30 years. The exact time depends on the rate and term.
What is the difference between biweekly and semimonthly?
Biweekly means every two weeks, which is 26 payments a year. Semimonthly means twice a month, which is 24 payments and does not add an extra payment.
Are there other ways to get the same savings?
Yes. Adding one twelfth of the monthly payment to each payment, or making one extra payment a year, gives close to the same effect without a biweekly program.