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Most homeowners make their mortgage payments once a month. However, you can make smaller payments toward your outstanding balance more frequently if there isn’t a prepayment penalty, which is unlikely. With a biweekly mortgage payment schedule, you can pay off your loan more quickly by making half your regular monthly payment every two weeks.

How do biweekly mortgage payments work?

A typical mortgage payment is due on the first of each month and includes principal and interest repayment as well as extra cash if you’re paying property taxes, homeowners insurance, mortgage insurance, and HOA fees into an escrow account.

The majority of each payment you make as you start repaying your mortgage actually goes to interest; as a result, your lender makes a lot of money while you barely make a dent in the principal.

Imagine you make a 10% down payment and a 30-year mortgage to purchase a $350,000 home tomorrow. Your interest rate is 7%, and your principal amount is $315,000. Your first mortgage payment breakdown would look like this:

Monthly payment	Principal	Interest
$2,095	$257.50	$1,837.50

Half of that mortgage payment, or $1,047, would be made on a biweekly basis. Each year, there are a total of 26 payments of 50 made every two weeks. At that rate, you would have paid $27,235 by the end of the year, which is $2,095 more than you would have paid if you had made payments once a month. However, that additional payment is applied entirely to your principal, resulting in significant savings and a much faster payoff:

Interest total	Payoff time
Monthly payments	$439,453	30 years
Biweekly payments	$327,470	23 years

Pros and cons of biweekly mortgage payments

Long-term savings: The biggest upside to biweekly mortgage payments — which is equivalent to making one extra payment a year — is the ability to save big on interest. For example, on that $315,000 biweekly mortgage, you’d save more than $31,000 in interest in the first 10 years versus making standard monthly payments.

Faster path to equity: Whether you’re planning to stay in the home forever or sell it before your loan term is up, it’s never a bad thing to accumulate more equity. You’ll either pay off the loan and live mortgage-debt free, or be able to take more of the profit from a sale. If you’re still in the house, that equity also gives you a low-cost borrowing option you can tap in the future.

Extra financial discipline: Contributing more money to your debt payments can help you establish smart money behaviors instead of spending your extra cash.

Potential impact on other savings goals: Before you commit to making biweekly mortgage payments, consider whether doing so would benefit your overall financial plan. A biweekly strategy means putting more money toward your mortgage every year, which could pull from other financial obligations like saving for retirement. Additionally, if you’re trying to pay off high-interest debt, the 16 percent APR attached to your credit card, for example, should be a bigger priority than the single-digit APR attached to your mortgage. As you assess your budget, see if the savings outweigh any losses elsewhere.

Possible prepayment penalty: Although not common, some mortgages come with a prepayment penalty that lenders charge if a borrower pays off the loan sooner than the repayment schedule dictates. Lenders can impose prepayment penalties in several different ways, such as charging 2 percent to 4 percent of the balance or a flat fee, like $3,000. Carefully read your loan documents or contact your servicer to see if you’d be subject to this fee. (Keep a record of who you spoke to in case there’s an issue later on.)

May require some extra setup: Lenders want to earn their share of interest, so arranging biweekly payments might not be that simple. Before making the extra payments, contact your servicer to coordinate your payment plan and verify that your additional amount will go toward the principal. Again, keep track of who you spoke with and get confirmation of your conversation in writing.

How to set up a biweekly mortgage payment plan

Contact the business that services your loan (this may or may not be your lender; see how to verify this). You can simply send half of your mortgage payment every two weeks if your lender accepts biweekly payments and applies the extra funds to your principal. For instance, if your monthly payment is $2,000, you can send $1,000 biweekly.

Alternatively, you can multiply your monthly payment by 12 and set aside that sum each month in a savings account. At the end of the year, you can send your lender the total amount as an additional payment that will only be applied to the principal.

Check the following to ensure your biweekly mortgage payment schedule is operating as intended:

Your lender allows a biweekly mortgage payment plan.

Extra payments are applied to the principal.

There are no prepayment penalties.

No fees are charged for setting up or maintaining a biweekly payment plan.

Your interest rate remains fixed for the life of the loan.

Last but not least, remember that your monthly payment includes homeowners insurance and property taxes. Therefore, be sure to ask your lender if these payments would increase your escrow cushion.

Are biweekly mortgage payments right for me?

Ask yourself:

What does my savings account look like? Getting on a faster path to being debt-free feels good, but it shouldn’t be at the expense of your emergency fund. Biweekly payments are generally only worth it if you have the cash to spare and won’t be stretching yourself too thin.

What other debts am I paying? If you’re still paying off your car, student loans or credit cards, consider the interest rate attached to them. You might be better off getting any other debts down to zero before shifting your attention to your mortgage.

What’s my interest rate? The higher your mortgage rate is, the more you’ll be able to save with biweekly payments. If you managed to lock in a record-low mortgage rate — somewhere in the neighborhood of 3 percent — you’ve already done a good job of lowering your interest charges.

Do I receive quarterly or yearly commissions? Remember: The biweekly payment schedule adds up to one additional monthly payment amount each year. If switching to more frequent payments complicates your life or your arrangement with your lender, you can also opt for sending one large additional sum to pay down the principal. If you work in sales and receive regular commission payouts, consider using those bigger paychecks for extra payments.

Would I be better off investing the extra cash? Save money by eliminating debt, or earn money by finding good investment opportunities? That’s a big question that doesn’t necessarily have an easy answer. While the market is facing some serious headwinds right now, those with a decent risk tolerance — and a long time horizon — might opt for putting money in the stock market in the hopes of generating a bigger return. On the other hand, eliminating debt is one of the best “investments” you can make, because it frees up your cash and lowers the cost of any future debt you take on.

Making biweekly mortgage payments properly results in less interest being paid over the course of your loan, saving you money and allowing you to pay off your balance more quickly. However, you need to make sure that the additional payments are going toward the principal and check to see if there are any prepayment penalties.

Also keep in mind that, in some cases, paying off your mortgage faster means that you will have to divert funds from other financial obligations. Examine your goals and budget in great detail prior to deciding to make payments every two weeks.