How Bi-Weekly Payments Save You Money
A standard mortgage requires 12 monthly payments per year. However, if you switch to a bi-weekly plan—paying half of your monthly mortgage payment every two weeks—you end up making 26 half-payments a year. This equals 13 full monthly payments annually. That one extra payment applied directly to your principal balance can significantly shorten your loan term.
How This Calculator Works
We compare two scenarios side-by-side:
- Standard Scenario: You make one payment on the 1st of every month for 30 years.
- Bi-Weekly Scenario: You pay half of that amount every two weeks. Because there are 52 weeks in a year, you make 26 payments.
- The Result: We calculate exactly how many years earlier your loan reaches $0 balance and how much interest you avoid paying to the bank.
Why Use This Calculator?
- Massive Savings: See how effective "one extra payment a year" really is.
- Debt Freedom: Visualize paying off your 30-year mortgage in roughly 24-25 years without a drastic lifestyle change.
- Motivation: Watching the "Time Saved" number grow is a powerful financial motivator.
Strategies for SECU Members
Many SECU members set up their mortgage payments to align with their bi-weekly paychecks. This "set it and forget it" strategy is one of the easiest ways to build wealth effortlessly. Simply ask your loan officer to set up bi-weekly drafting.