Biweekly Mortgage Calculator
What is a Biweekly Mortgage Payment?
Biweekly mortgage payments are a payment schedule where you make half your monthly payment every two weeks, saving money on interest and speeding up loan payoff. You'll finish paying off your mortgage two months sooner than with traditional monthly installments by making 26 biweekly payments over a year (equivalent to 13 total monthly payments).
Calculating Your Biweekly Mortgage Payment
When considering a home purchase or refinancing an existing mortgage, calculating biweekly mortgage payments is an essential step to get the best deal possible. A biweekly payment is paid every two weeks instead of once a month and can help save thousands in interest over its lifespan while helping pay off your loan much quicker. In this article, we'll look at using a biweekly mortgage calculator to figure out your payments.
The formula to calculate the biweekly mortgage payment is as follows:
Biweekly payment = (P x r / 26) + (P x t / 26)
P is the principal amount of the mortgage
r is the annual interest rate (expressed as a decimal)
t is the length of the mortgage term in years
For example, let's say you have a mortgage of $300,000 with an annual interest rate of 4% and a term of 30 years. To calculate the biweekly payment, you would use the following formula:
Biweekly payment = ($300,000 x 0.04 / 26) + ($300,000 x 30 / 26 / 26)
Biweekly payment = ($400 / 26) + ($346.15)
Biweekly payment = $15.39 + $346.15
Biweekly payment = $361.54
Therefore, your biweekly mortgage payment would be $361.54.
How Biweekly Mortgage Payments Work
A biweekly mortgage payment plan involves making half your monthly mortgage payment every two weeks. This means you make 26 payments per year, equivalent to 13 monthly payments. By doing this, you can reduce the amount of interest you pay over the life of your mortgage, as well as shorten the time it takes to pay off your loan.
Factors to Consider Before Switching to Biweekly Payments
Before switching to a biweekly mortgage payment plan, consider a few factors. First, you'll need to check with your lender to see if they offer this option and if any fees or restrictions are involved.
You'll also need to make sure you can afford the higher payments. While biweekly payments can save you money over the long term, they can also strain your budget if you're unprepared. Make sure to factor in any other expenses, such as car payments or student loans, before committing to a biweekly payment plan.
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