What Is a Biweekly Mortgage Calculator?

Interested in paying your home loan off faster and paying less interest over the life of your loan? It may be time to begin making biweekly home loan payments.

A monthly home loan payment is standard for the majority of loan providers. On a monthly schedule, you make one home mortgage payment every month, resulting in 12 home loan payments each calendar year. When you pay your mortgage on a biweekly schedule, however, you pay half of a mortgage payment every two weeks. Throughout a year, this leads to 26 half payments or 13 full mortgage payments - one extra payment compared to a regular monthly schedule.

Curious what a biweekly home loan payment may imply for your financial resources? Whether you're considering changing a current mortgage to biweekly payments or checking out a brand-new mortgage, it's an excellent concept to get a clear image of your payment choices. Use our biweekly home loan calculator to compute the difference that biweekly payments can make.

How Does the Biweekly Mortgage Calculator Work?

It's simple to utilize the biweekly mortgage calculator. First, go into the following info:

Principal loan balance: If you have not begun paying your home mortgage yet, this will be the overall loan amount. If you've been paying your home loan, enter the loan balance that stays. Interest rate: Enter the existing interest rate of your loan. Make certain to be exact down to the decimal point. Loan term: The term of your loan is the variety of years up until the loan is due to be paid off. If you have a 30-year loan, your loan term is 30 years. Enter that details here.

Once this information has actually been entered, all that's left to do is press "Calculate".

Next, it's time to see your payoff outcomes. The biweekly home loan calculator takes this information and produces 2 various computations:

Monthly home loan payments: First, the biweekly home mortgage calculator tells you the information of what a payment may look like. It computes your month-to-month payment amount, the overall interest you'll pay over the lifetime of your loan, and the typical interest you'll pay every month. Biweekly mortgage payments: Next, the biweekly mortgage calculator offers the biweekly payment details. You'll see the biweekly mortgage payment quantity, total interest you'll pay over the life of the loan, and the average interest paid per duration. You'll observe that by making biweekly mortgage payments, you can reduce the overall quantity of interest paid over the life of the loan.

Under the calculator results, the biweekly home loan calculator shows a chart of your loan balance in time when using month-to-month payments (the black line) versus biweekly payments (the red location), noted here as the "Accelerated Balance".

You'll see that with biweekly mortgage payments, your loan balance will reduce at a faster rate and you'll pay off your loan in less time. The faster you settle your loan, the less balance will remain that you need to pay interest on. That indicates you'll pay less in interest over the life of your loan.

Benefits of Biweekly Payments

While the difference between a monthly versus biweekly home mortgage payment schedule may seem minimal, the additional month's mortgage payment each year makes a big difference in the long run. Benefits of biweekly payments consist of:

Settling the loan much faster: Because there's an additional loan payment every year, debtors who make biweekly payments settle their loans much quicker than monthly payment borrowers. Paying less general interest: Because the loan is settled much faster, less primary loan balance remains to pay interest on. In time, this results in substantially less interest paid. The higher your interest rate, the more of a difference paying biweekly can make in the amount of interest you pay. Building equity quicker: As you settle your home mortgage, the quantity you settled becomes your equity in your house. When you settle your mortgage faster with biweekly payments, you'll construct equity much faster. This comes in handy if you decide to sell your home before the loan is paid off or if you wish to get a home equity loan, home equity line of credit, or cash-out re-finance at some point.

Biweekly vs. Bimonthly Payments

Some lending institutions also use the option to pay a loan bimonthly. Borrowers who do so will pay half of their loan payments monthly, typically on the first and 15th. Similar to making a monthly mortgage payment, this results in 12 payments each year. The only distinction is that payments are made in half, two times each month.

Making bimonthly home mortgage payments can assist debtors reduce the amount of interest paid over the life of the loan. However, they don't have as big of an effect as biweekly home mortgage payments, which help you settle your loan quicker, pay less interest gradually, and build equity in your house faster.

That stated, bimonthly loan payments may be an excellent alternative for some. People who make money on a bimonthly schedule may find this payment schedule beneficial. Some may find that paying their loan instantly after getting their paycheck works well for their capital and budgeting efforts. Others might simply feel much better paying a smaller sized amount two times monthly, rather than paying a lump sum at one time.

Related Calculators

Interested in other tools to enhance your financial resources? We provide a variety of calculators to help you understand the monetary effects of various kinds of loan payments, rates of interest, and more:

Blended Rate Calculator: Do you have multiple different loans with several various rates? Our mixed rate calculator averages these rates into a single rates of interest to assist you better comprehend how much you're paying in interest. DSCR Calculator: Use this tool to rapidly estimate your financial obligation service protection ratio, which is a crucial metric in identifying your eligibility for a DSCR loan. VA Loan Calculator: Veteran home buyers qualify for unique loans with a series of benefits, like low loan rates, no down payment, and more. Use this calculator to identify what a VA home mortgage might appear like for you. Bank Statement Loan Calculator: If you're self-employed or an independent contractor, use our bank statement calculator to see what kind of mortgage you can receive using bank declarations. 2/1 Buydown Calculator: Use our 2/1 buydown calculator to see if temporarily purchasing down your rate of interest is a wise decision based on your financial resources. Debt Consolidation Calculator: A debt consolidation loan rolls multiple financial obligations into a single payment, normally with a lower rate. See what a loan like this may appear like based on your present financial obligations. VA Loan Affordability Calculator: Estimate how much home you can afford when using a VA loan. Mortgage Payoff Calculator: See how changing your mortgage payment impacts your loan term and the amount of interest paid with our mortgage benefit calculator. Rent vs Buy Calculator: Unsure about whether you should rent or purchase? Our lease vs buy calculator can assist you compare the short- and long-term expenses involved with both alternatives.
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Frequently Asked Questions

Is it better to do month-to-month or biweekly home mortgage payments?

Finding the right payment schedule depends on your specific needs. Biweekly home loan payments may be a better option if:

You can manage to pay more money each year: On a biweekly payment schedule, you'll be making one extra home loan payment each year. It is necessary to identify whether there's room in your budget plan for this expense. You desire to pay your loan off more rapidly: Depending upon the terms of your loan, making biweekly payments will enable you to pay off your loan much more rapidly. Use our biweekly home mortgage calculator with additional payments to see how additional payments impact your loan term. You want to pay less interest: Because you settle your loan faster with biweekly home mortgage payments, your loan will have less time to accrue interest and you'll pay less interest in time. This can be specifically helpful to those with a fairly high mortgage rate.

What are the drawbacks of making biweekly home loan payments?

The primary downside of biweekly home mortgage payments is the greater annual cost. Because you make 26 half-payments throughout a year, or 13 full mortgage payments, you'll make one extra loan payment annually. Depending on your loan and financials, the additional payment can be a significant concern to handle.

In some cases, biweekly payments might come with additional costs. Some home loan loan providers charge an additional fee for biweekly payments or charge a charge for loans that are paid off early. It's a good concept to research whether changing to biweekly payments with your lender has any involved costs so that you can compute the true cost of biweekly payments.

Does making biweekly payments reduce the amount of interest I pay?

Yes. By switching to a biweekly payment schedule, you'll pay much less interest over the term of your loan. Interest accrues as a percentage of your loan's remaining balance. Because biweekly payments lower your remaining balance at an accelerated speed, the interest on the balance will be less, too.

Use our mortgage calculator for biweekly payments to see the difference in overall interest paid on a mortgage that's paid monthly vs a mortgage that's paid biweekly.

Bill Lyons is the Founder, CEO & President of Griffin Funding. Founded in 2013, Griffin Funding is a national boutique mortgage lending institution concentrating on providing 5-star service to its clients. Mr. Lyons has 23 years of experience in the mortgage organization. Lyons is viewed as a market leader and specialist in realty finance. Lyons has been included in Forbes, Inc., Wall Street Journal, HousingWire, and more. As a member of the Mortgage Bankers Association, Lyons is able to keep up with important modifications in the market to deliver the most value to Griffin's customers. Under Lyons' management, Griffin Funding has actually made the Inc.
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