Is a Biweekly Mortgage Okay?

Jeremiah asks what Dave thinks about a biweekly mortgage payment.

QUESTION: Jeremiah on Twitter asks what Dave thinks about a biweekly mortgage payment.

ANSWER: No problem with it at all. It’s awesome, and it’ll pay off a 30-year mortgage in about 22.8 years on average, depending on the interest rate, of course, so it’s helpful to pay it biweekly. You would not pay extra money, though, to pay it biweekly. You wouldn’t pay somebody a fee to set it up, like $500, because all a biweekly does—it’s not magical because it’s biweekly—is pay a half a payment every two weeks. There are 26 two-week periods in a year. That’s 13 whole payments you’re paying. The reason it’s paying off early is you’re paying an extra payment a year—not because you’re paying it biweekly. There’s no magic in the biweekly, so don’t pay someone extra to do it, but if you want to set your mortgage up that way originally, it’s certainly fine to do that. But again, do not pay a $495 fee or a $14 a month fee for a biweekly.

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