Faster payoff and less interest paid are two big advantages, but there are drawbacks to paying half your mortgage twice a month. 

Did you know that making bi-weekly mortgage payments can help you pay off your house sooner and save money? By making half a mortgage payment every two weeks instead of once a month, you’ll make 13 payments each year instead of 12. By doing so, you accelerate the payoff of your principal and reduce the overall interest paid on the loan. To see if this payment schedule makes sense for you, take a look at some of the pros and cons of biweekly mortgage payments.

Pros of bi-weekly mortgage payments

The biggest advantage of paying half of your home mortgage every two weeks is the savings in interest. If you start with bi-weekly payments from the beginning of a 30-year loan, you’ll shave off over four years of the repayment period. Depending on the size of your loan and its interest rate, this could add up to tens of thousands of dollars.

The quicker payoff also means you make more money available down the road. Money you might use for a child’s tuition, travel, retirement or another personal goal.

Cons of bi-weekly mortgage payments

Making bi-weekly payments means you need adequate cash flow to cover both payments. Sometimes pay schedules make it difficult to make multiple payments each month even though cash outflow remains the same.

If you’re on a tight budget, bi-weekly payments can make it more difficult to manage your finances.

Another con of bi-weekly payments is that it leaves less cash for other investments. If you have a very low mortgage interest rate and the opportunity to invest in something that offers a high return, bi-weekly payments may not make sense for you.

Also, some lenders charge a penalty for paying off a loan early. Others charge for the service of more frequent payments. Check the terms of your loan; if there are fees or penalties, calculate if the bi-weekly payments are worth it.

It’s easy and free to make bi-weekly payments on a Consumers home loan

At Consumers, we always look out for you. That’s why Consumers home mortgages can be paid off early with no penalty, and bi-weekly payments are free.

To set up bi-weekly mortgage payments with Online Banking to pay off your loan faster, follow this guide.

Consumers helps more than 2,000 members finance land, first and second homes, and home improvement projects each year. We’d love to help you with a mortgage or home equity line of credit; contact us online or call us at 800-991-2221.