Bi-Weekly is a Weak Choice

Making additional principal contributions to your mortgage will save interest, build equity and shorten the term on a fixed-rate mortgage.  The concept is sound but bi-weekly may not be the best way to do it. 

One strategy is to make a payment every two weeks throughout the year in the amount of half of your required principal and interest payment.  Twenty-six half payments would equal thirteen full payments which would be one extra full payment per year applied to the principal.

The practical problem with this approach is that lenders may not accept partial payments throughout the year.  This means that you'd have to arrange a third-party company to accept your payments and forward them at a time that is acceptable to the lender.  Likely, there would be a fee for providing this service.

Another problem with this approach is that many people are paid on the first and fifteenth of the month and making payments every two weeks may not be practical due to cash flow.

Another way to accomplish this saving would be to make one additional principal and interest payment per year that would be applied to the principal owed.  The practical issue here is that it might be an amount that isn't convenient unless a person receives a bonus annually.

There is a much easier way to handle this.  Determine how much you can afford to pay monthly in addition to your regular mortgage payment.  Use your bank's autopay program to write the check and send it to the lender.

This will make the process automatic and after a while, you'll probably forget that you're even paying extra.  However, when you see how your unpaid balance is reducing faster and your equity is growing, you'll feel good about your decision.

Use this Equity Accelerator to see how it would work with your mortgage.