Mortgage payoff calculator with extra principal payment

This bi-weekly mortgage calculator has more features than most including the...show more instructions

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How Much Can You Save By Making Bi-Weekly Mortgage Payments?

Do you want to pay off your mortgage early?

Not sure where you will find the extra funds to make it happen?

Thankfully, you can significantly reduce your debt without feeling pinched by making biweekly mortgage payments.

This Bi-Weekly Mortgage Calculator makes the math easy. It will figure your interest savings and payoff period for a variety of payment scenarios.

You can make biweekly payments instead of monthly payments, and you can make additional principal payments to see how that also accelerates your payoff.

Each of these payment alternatives will take you closer to being debt free.

Here's everything you need to know to get started . . . .

How Bi-Weekly Mortgage Payments Work

Making biweekly mortgage payments is a strategy that can help you save a lot of money in interest and pay off your mortgage early.

Instead of making one payment every month, you'll be making a payment every other week. This bi-weekly pattern is distinct from a bimonthly mortgage payment which may or may not involve extra payments.

With a bi-weekly payment you'll be be making 26 payments instead of 12 – albeit smaller payments. The net effect is similar to one extra monthly payment (13) per year.

The end result of paying every two weeks is you'll be paying more every year, regardless of whether or not you make extra principal payments in addition to your biweekly payment. This requires little sacrifice, but reaps huge savings as you can see when you input your mortgage payment information into this Bi-Weekly Mortgage Calculator.

Are Bi-Weekly Payments Right For You?

Before you start bi-weekly payments make sure it is a good fit for your situation. Here are the important points to consider:

1. Do you plan to stay in your house long enough? If you plan to stay in your house for a short time, like 5 to 7 years, then you might be better off focusing your money in some other investment. Bi-weekly payments have a bigger impact when you stick with it long enough to make a difference.
2. Are you nearing your retirement? Using your retirement savings to accelerate your mortgage payoff involves complicated analysis to determine what is best. There are tax considerations on both sides of the savings equation. It also involves estate planning, asset protection, and much more than can be covered in this brief article. Please consult with a qualified financial professional if this is your situation.
3. Are you paid enough every two weeks? Bi-weekly mortgage payments work best when you are paid every other week and your income is high enough to support the payment. It is easier to match your largest expense (mortgage payment) to your income when the payment period matches your pay period. Similarly, if you are paid monthly then it is usually easier to stick with a monthly payment period and just add extra principal to accelerate your payoff.
4. Have you checked other investment options? You should always invest your money in whatever provides the highest after tax return. Before accelerating your mortgage consider competing investment alternatives for building equity.

Related: 5 Financial Planning Mistakes That Cost You Big-Time (and what to do instead!) Explained in 5 Free Video Lessons

How To Set Up Bi-Weekly Payments

Once you've determined biweekly payments (and/or extra payments) are right for you, it's time to set it up and start saving!

Many banks and mortgage companies will allow you to reconfigure your existing mortgage into a biweekly payment plan. You'll need to call and ask because they typically don't advertise this feature.

Alternatively, you can simply split your own mortgage payment in half, and pay that amount every two weeks. The end result will be the same, but you won't have the ease of automation you might desire. However, verify with your bank first that this will still satisfy your payment terms and not cause a prepayment penalty or other problems.

If you choose to add extra principal to your required payments, you may have to check with your mortgage holder to find out if anything is required so that the extra money goes directly to principal instead of simply prepaying required payments.

Final Thoughts

The great thing about the bi-weekly mortgage payoff plan is you can easily reduce your mortgage loan term by 6 to 8 years.

In addition, if you are receiving your salary every two weeks it can actually be more convenient to use biweekly mortgage payments than monthly payments.

If you’re still confused whether this payment option is best for you, use the biweekly mortgage calculator above to help you see the total savings that you could be getting. Also, be sure to print out amortization payment schedules to keep you on track!

Bi-Weekly Mortgage Payment Calculator Terms & Definitions:

• Bi-Weekly Payments – Payments that occur once every two weeks.
• Mortgage Loan – The charging of real property by a debtor to a creditor as security for a debt.
• Principal Amount – The total amount borrowed from the lender.
• Interest – The percentage rate charged for borrowing money.
• Payment – The amount you pay for goods, services, or debts incurred.
• Amortization Schedule – A table of all payments for the entire loan term showing each payment broken out into interest, principal, and remaining loan balance.
• Loan Term – The amount of time to pay the loan off.
• Due Date – The day on which payments are required.
• Borrower – An entity receiving money with a promise to pay it back with interest.
• Lender – An entity that lends money to an individual.
• Escrow – Money held by a third party to pay a party that is owed, in this case, typically property taxes and insurance.
• Extra Payment – Payments made above and beyond the required amount.

Related Mortgage Calculators:

• Mortgage Payment Calculator With Amortization Schedule: How much will my monthly mortgage payment be? Includes taxes, insurance, PMI, and printable amortization schedule for handy reference.
• Mortgage Payoff Calculator: How much extra payment should I make each month to pay off my mortgage by a specific date (and how much interest will I save)?
• Mortgage Balance Calculator: What is my mortgage balance given the number of payments I've already made (or still need to make)?
• Mortgage Refinance Calculator: How long will it take to break-even on my refinancing costs and what will be my total interest savings?
• Interest Only Mortgage Calculator: How much lower will my payment be on an interest only mortgage compared to a conventional principle and interest mortgage?
• Second Mortgage Calculator – Consolidate Savings With Refinance: How much will I save consolidating my first and second mortgages into a new first mortgage?
• Rent vs. Buy Calculator: Should I rent or buy? What's the better deal?
• Mortgage Affordability Calculator: How much house can I afford if I paid the same amount in mortgage as I pay in rent?
• ARM Mortgage Calculator: How does an adjustable rate mortgage (ARM) compare to a fixed rate mortgage over the life of the loan (as opposed to just the teaser payment)?
• Balloon Mortgage Calculator: How much will I owe (balloon) at the end of the payment period?

Next Steps

Mortgage rates can't get much lower! It's the perfect time to apply whether you hope to buy or refinance. Check today's best available mortage rates and see which lenders are taking new applications: See Today's Best Available Rates →