Bi-Weekly Mortgage Savings

Did You Know?

Making one extra mortgage payment a year will knock years off your mortgage and save you thousands of dollars.

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The typical mortgage is structured so that you make one payment every month or twelve payments per year. You pay the same amount at the same time each month so there are no surprises and it’s easy to budget for.

But what if you split that monthly payment up and made bi-weekly payments? It may surprise you, but you could save yourself tens of thousands of dollars and cut years off of your mortgage.

If you search for "bi-weekly mortgage" on the Internet, you'll be inundated with companies offering "Bi-weekly Mortgage Reduction Services," "Half Pay" or "Bi-weekly Savings Programs." Beware, you may be entering dangerous waters.

Beware of Bi-Weekly Mortgage Reduction Services and Savings Programs

These "Reduction Services" and "Savings Programs" charge fees to "make the bi-weekly mortgage payment" for you. The enticement is that they will save you an impressive amount of money on your mortgage and reduce the number of years you pay on your mortgage.

The enticement is that they will make bi-weekly mortgage payments for you.

The real story is that they are not actually making bi-weekly payments on your mortgage. They are making bi-weekly deductions from your bank account. These funds are placed into an account from which your monthly mortgage payment is made (which only takes 24 deductions - but during the course of a year 26 deductions will be made from your account). With the extra 2 deductions, the "Service" makes an additional mortgage payment. In other words rather than making 12 mortgage payments, 13 payments are made.

The enticement is that they allude to the fact that only they can provide this special service and that it would either not be possible for you to get on your own or that you won't have the time or discipline to make it happen.

The real story is that you can easily make an additional mortgage payment each year yourself. An easy way to do this is to have your mortgage payment automatically deducted from your account each month with an additional 1/12 payment to be applied to the principal amount. At the end of 12 months, you will have made an additional payment. And you won't have to pay any fees to a "Service."

The savings are significant, and the higher your real estate mortgage rate the greater the savings. For example:

BiWeekly Mortgage Savings Image 

bi weekly mortgage payment savings

For more information call our Berlin real estate agents or email us below:



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