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Bi Weekly Mortgage Payment Programs - Does Making Your Mortgage Payment Every Two Weeks Pay Off?

Bi-weekly mortgage payment programs were all the rage not to long ago. You couldn't turn on a early morning show such as Good Morning America or The Today Show without hearing about the benefits of bi-weekly mortgage payments. Everybody and their brother are promoting this mortgage service but what exactly are they promoting and what exactly are they actually providing.

It sounds good when you first start looking at the ads for the bi-weekly mortgage program. Pay off your 30 yr fixed rate mortgage in 23 years is what they state but exactly how are they doing it? For starters they are charging you a fee, usually upfront, of a few hundred dollars.

The service that they provide is they collect your mortgage payment every two weeks instead of once a month. This means that instead of making 12 monthly mortgage payments per year you are actually making 13 mortgage payments. Sounds good, doesn't it? But in fact, they are not making your mortgage payments every two weeks. They are making bi-weekly deductions from your checking account. These funds are then placed into an account and they will make your monthly mortgage payment for you once a month. During the course of a year you will have deposited 26 bi-weekly payments into the account so they will have one extra mortgage payment that we'll refer to as lucky number 13.

This service will pay off your mortgage sooner than if you made the 12 regular monthly payments during the year but it's only because you are actually making 13 payments not 12. You can easily do the same thing yourself by making one extra monthly payment per year yourself. If it is easier you can always add extra money to your regular monthly payment. Just be sure that you make a note on the check and the statement that a certain dollar amount is for extra principle. To find out how much extra to include on your monthly payment just divide your monthly mortgage payment by 12.