Biweekly Mortgage Calculator

How it is calculated

First the tool finds the ordinary monthly payment with the standard formula M = P × i ÷ (1 − (1 + i)−n), where i = rate ÷ 100 ÷ 12 and n = years × 12 (at 0% it is P ÷ n). Total monthly-plan interest is M × n − P.

Then it simulates the biweekly plan: a payment of M ÷ 2 every two weeks, with interest each period of balance × rate ÷ 100 ÷ 26, until the balance reaches zero. Periods are converted to months with periods × 12 ÷ 26. Months saved are the original term minus that figure, rounded, and interest saved is the difference in total interest. Since 26 half-payments equal 13 monthly payments, you pay one extra month's payment a year. The tool assumes the lender applies each payment immediately; plans that hold half-payments until a full month is collected save less.

Common mistakes

• Confusing biweekly (every two weeks, 26 payments a year) with twice a month (24 payments a year). Twice a month gives no extra payment, so the savings do not apply.
• Assuming every lender applies biweekly payments right away. Some hold each half-payment until the full monthly amount is available, which removes most of the benefit.
• Ignoring fees. Some lenders charge for a biweekly service, which can eat into the interest saved.
• Entering the balance of an older loan with its original term. Use the current balance and the remaining years.
• Expecting the result for an escrow payment. Only principal and interest are modelled, not taxes and insurance.