A biweekly mortgage payment schedule can significantly reduce your loan term and save you thousands in interest. Use this calculator to see exactly how much faster you can pay off your loan and the total interest savings compared to a standard monthly payment.
Biweekly Mortgage Calculator
Final Calculation Results
New Term
Biweekly Payment
Original Monthly Payment
Biweekly Mortgage Calculator Formula
1. Monthly Payment (M):
$$M = P \frac{i(1+i)^{n}}{(1+i)^{n}-1}$$Where $P$ is the Principal, $i$ is the monthly interest rate ($R/12$), and $n$ is the total number of monthly payments ($T \times 12$).
2. Biweekly Payment (B): $B = M / 2$.
3. Interest Savings (S): Calculated by finding the new, reduced term ($T’$) when $13$ monthly payments are made per year (via $26$ half-payments).
Formula Source: Investopedia: Biweekly Payments, Bankrate: Amortization Basics
Variables Explained
- Loan Amount ($): The initial amount borrowed. This is the Principal (P) used in the mortgage formula.
- Annual Interest Rate (%): The yearly rate of interest (R). This is converted to a monthly rate for the calculations.
- Original Loan Term (Years): The initial duration of the loan, typically 15 or 30 years.
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What is a Biweekly Mortgage Calculator?
A biweekly mortgage calculator is a tool used to determine the savings in interest and the reduction in loan term that results from making half of your standard monthly payment every two weeks. Since there are 52 weeks in a year, making a half-payment every two weeks results in exactly 26 half-payments, which is equivalent to 13 full monthly payments annually.
By paying the equivalent of an extra monthly payment each year, the principal balance is reduced faster, leading to a significant decrease in the total amount of interest paid over the life of the loan. This is one of the most effective strategies for accelerating debt repayment without dramatically increasing the burden of individual payments.
How to Calculate Biweekly Savings (Example)
- Determine Monthly Payment: Calculate the standard monthly payment ($M_m$) for a $\$300,000$ loan at $6\%$ interest over $30$ years. The payment is $\$1,798.65$.
- Determine Biweekly Payment: Divide the monthly payment by two: $\$1,798.65 / 2 = \$899.33$. This is the biweekly payment ($M_b$) you would make 26 times per year.
- Calculate Annual Difference: The total paid annually is $26 \times \$899.33 = \$23,382.58$. The monthly payment total is $12 \times \$1,798.65 = \$21,583.80$. The difference is $\$1,798.78$ (roughly one extra monthly payment).
- Find New Term: Using an equivalent monthly payment of $\approx\$1,948.55$ (the annual total divided by 12), solve the amortization formula for the new term ($T’$). For this example, the term would be reduced from 30 years to approximately 25 years and 9 months.
- Calculate Savings: Subtract the total interest paid under the new term from the total interest paid under the original 30-year term.
Frequently Asked Questions (FAQ)
Yes, absolutely. Since the extra payment is applied directly to the principal, the interest starts compounding on a lower balance sooner, leading to substantial savings and a shorter loan term.
For a standard 30-year mortgage, switching to a biweekly payment schedule typically reduces the loan term by about 3 to 5 years, depending on the interest rate.
No. Biweekly means a payment every two weeks (26 per year), resulting in one extra payment annually. Bimonthly means a payment every two months (6 per year), which is a slower pace than standard monthly payments.
Some lenders offer automated biweekly programs, often for a fee. Check with your mortgage servicer, but you can also achieve the same savings by simply making one extra principal-only payment each year.