What is the benefit of a bi-weekly mortgage payment plan?

The benefit of a bi-weekly mortgage payment plan is that it results in making extra payments each year. With a bi-weekly plan, homeowners make half of their monthly mortgage payment every two weeks. This arrangement leads to a total of 26 half-payments, which equates to 13 full monthly payments in a year instead of the usual 12. The effect of this is that the extra payment is applied directly to the principal, which can significantly reduce the total interest paid over the life of the loan and help shorten the loan term.

This strategy effectively accelerates the homeowner’s path to paying off the mortgage, leading to substantial savings in interest costs over time. Understanding the financial implications of this method is crucial for homeowners looking to pay off their mortgages more quickly and efficiently.