Mortgage Calculator: Save on Interest with Biweekly Payments

Are you looking to save money on your mortgage and pay it off faster? Switching to biweekly payments could be the solution you've been searching for. Instead of making 12 monthly payments each year, biweekly payments mean making half your monthly payment every two weeks, resulting in 26 half-payments — or 13 full payments annually.

The Math Behind the Savings

On a standard 30-year, $300,000 mortgage with a 5.5% interest rate, you'd pay approximately $1,703 per month. Over 30 years, that adds up to $613,080 in total payments, with $313,080 going toward interest.

By switching to biweekly payments, you'd make payments of $851.50 every two weeks. This seemingly small change would:

• Pay off your mortgage about 4 years earlier
• Save approximately $55,000 in interest
• Build equity faster throughout the life of your loan

Is Biweekly Right for You?

Biweekly payments work particularly well for homeowners who get paid every two weeks, as you can align your mortgage payments with your paycheck schedule. However, before switching, make sure your lender offers this option without additional fees.

Use our biweekly mortgage calculator to see exactly how much you could save with your specific loan details.

Understanding current mortgage rates in your local area is essential when planning to buy a home or refinance an existing mortgage. While national averages provide a general guideline, local rates can vary significantly based on regional economic factors, housing demand, and lender competition.

How Local Rates Affect Your Payment

Even a small difference in interest rates can have a significant impact on your monthly payment and the total cost of your mortgage. For example, on a $350,000 mortgage with a 30-year term:

• At 5.5%: Monthly payment of $1,987, with a total interest of $365,371
• At 5.0%: Monthly payment of $1,878, with a total interest of $326,379

That 0.5% difference saves you $109 per month and nearly $39,000 over the life of the loan!

Finding the Best Local Rates

To find the best mortgage rates in your area:

• Shop around with at least 3-5 different lenders
• Consider working with a local mortgage broker who knows the regional market
• Check with local credit unions, which often offer competitive rates to members
• Use our mortgage calculator to compare different rate scenarios

Remember that the lowest rate isn't always the best deal — look at the overall costs, including closing fees and points.

Adding even small extra payments to your mortgage can yield significant savings over time. When you make an extra payment, it goes directly toward reducing your principal balance, which means you'll pay less interest overall and potentially shorten your loan term by months or even years.

Strategic Ways to Make Extra Payments

There are several approaches to making extra mortgage payments, each with its own advantages:

• Monthly extra payments: Adding just $100 extra to each monthly payment on a $300,000 mortgage can help you pay off your loan about 3 years earlier and save approximately $30,000 in interest.
• Annual lump sum: Making one extra payment each year, perhaps from a tax refund or bonus, can reduce your loan term by about 4 years.
• Biweekly payments: As discussed in our previous article, this method effectively gives you 13 monthly payments each year instead of 12.

When Extra Payments Make the Most Sense

Extra mortgage payments make the most financial sense when:

• You're in the early years of your mortgage when more of your payment goes toward interest
• You have a higher interest rate (generally above 4%)
• You don't have higher-interest debt such as credit cards or personal loans
• You've already built an emergency fund and are contributing to retirement

Use our mortgage calculator with extra payment options to see how different payment strategies affect your specific situation.