Easy answer: maybe. Nobody likes making their mortgage payment every month, and the thought of splitting it up and making two payments per month is enough to make many a homeowner scoff at the idea and say, “no thanks.” Yet, it’s certainly worthy of your consideration. The big question is if it’s worth your time and if it will make a dent in your home’s mortgage. Let’s find those answers out together.


How this payment method works

 Rather than making 12-monthly payments per year, you will be making half of your monthly payment bi-weekly. Now, it may not sound like you’re making any headway since each month’s payment stays the same, but Nerdwallet begs to differ. 52-weeks are in a calendar year, so you will actually be making 26 payments rather than 12. 26 divided by 2 equals 13, allowing you to squeeze in an extra monthly mortgage payment each calendar year. Joe Zeibert – Senior Director of Ally Home – uses a typical 30-year, $250,000 fixed loan with 4% interest as an example to explain the impact this can have on borrowers:

“Bi-weekly payments would save a borrower nearly $30,000 in interest charges and have the loan paid off in five fewer years. Because you’re making the equivalent of 13 monthly payments each year, you’ll pay less total interest while lowering your principal balance at a much quicker pace.”

 Be watchful

 If your lender does not offer a payment program that allows you to pay bi-weekly, you may be forced to use a third-party payment processer to make the payment for them. Such processers may charge a set-up fee, while others may charge a monthly fee just for the convenience of paying bi-weekly. Some lenders may even hold onto the excess amount and apply it to the next month in addition to such fees, thus making this option worthless. If you must use a third-party payment processer, understand the caveats that come with each of them.

Alternative solution

 Loans Canada suggests rather than making bi-weekly payments, add an extra 1/12 of your mortgage payment each month. This will allow borrowers to pay down an extra month in a 12-month calendar year without running the risk of missing a payment and hurting your credit. After all, if you’re just one day late on paying a half of your monthly payment, it’s going to give your credit a kick in the pants. If you can pay on time every time this isn’t a problem, but it’s a decent way to achieve the same results with an added safety net to combat forgetfulness.  

Are you financially sound enough to make bi-weekly payments?

 Depending on your pay schedule, bi-weekly payments may simply not be a viable option. Analyze your budget before taking the plunge of making extra payments on your mortgage each month and keep in mind when other bills and debts are due as well. Readjusting such a large payment can unbalance your family’s monthly budget, so do your homework before committing to a new payment plan.